Ellenwood, GA · Member since 2016 · 267 posts · 70 votes
Hi All
I'm in Goergia and trying to find the best lenders offering high LTV on primary residence as well as investment properties.
Hoping for 90% LTV on Primary ( found 89.99% via Discover) and 75/80% on investment. Please clarify whether it's a HELOAN or HELOC, thanks. Also, does the initial draw have to be the full amount like a HELOAN even though the product might say HELOC?
I do quite a few HELOANs for clients. The 2 biggest deciding factors between the 2 for my clients are usually income type (full doc, bank statement, P+L, DSCR), and then how soon are they going to be needing to use the funds. If they're using the funds right away, usually the HELOAN makes more sense since they don't need to worry about being able to pay down the credit line and have it available later. Income doc type is going to be all but automatic one way or the other. While HELOCs do exist for bank statement income, the pricing is rough and a HELOAN is priced much better. If they need a P+L or DSCR 2nd, then HELOAN is the only option.
For the cookie-cutter full doc borrowers, Figure is a perfect option. Anything straying from that super simple income, there are definitely some great HELOAN products that can close in around 10-14 days as Jason mentioned.
Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
1y
Hi Wendy,
Coming from a Banker in most cases the Heloc is a Line of credit you only pay on the amount you use and a Heloan is the bank/lender gives you all cash.
Lets say you borrow $10K as a heloc and in the first few months you take out $1500.00 your payment is only going to be based off the $1500 and not the $10K because the rest in the line of credit (LOC) not being used - Same as a credit card. You only take what you need when you need it.
Heloan usually means 2nd place like a cash out refinance but they do not pay off the first mortgage they give you an amount in cash like the $10K above. Only difference is the $10K is in your bank and the interest starts so you are paying on the full $10K over how ever many years they offer.
Lastly, depending on your first mortgage rate it may be best to just do a "Cash out refinance" becuase its over a 30 year mortgage and the rates are lower then both Heloc or Heloans. If you have any questions feel free to reach out I can help clear any confusion or help look at the comparisons.
Ellenwood, GA · Member since 2016 · 267 posts · 70 votes
1y
@Jason Wray Thanks for your response. I do understand the difference as you stated. What I have been finding is that the traditional players ( big banks, Cu ) that offer a true Heloc are assisting about 60 days to close and fund while the more online players such as Figure is offering A Heloc that to me is really a Heloan because you have to take the money over approved for the full amount but they promise a 7 days payout all things being equal.
This is why I specifically asked if anyone know any Lenders and to please clarify HELOC or HELOAN.
@Jason Wray Thanks for your response. I do understand the difference as you stated. What I have been finding is that the traditional players ( big banks, Cu ) that offer a true Heloc are assisting about 60 days to close and fund while the more online players such as Figure is offering A Heloc that to me is really a Heloan because you have to take the money over approved for the full amount but they promise a 7 days payout all things being equal.
This is why I specifically asked if anyone know any Lenders and to please clarify HELOC or HELOAN.
Thats crazy to take that long it should only take 10-14 days to close on a Heloc or a Heloan. Cash out refinance take 20-30 days max. I cannot speak for evey bank/lender but that's what I see as teh normal turn time. The good thing is rates have dropped so again the cash out refinance is usually the lower/better option.
I do quite a few HELOANs for clients. The 2 biggest deciding factors between the 2 for my clients are usually income type (full doc, bank statement, P+L, DSCR), and then how soon are they going to be needing to use the funds. If they're using the funds right away, usually the HELOAN makes more sense since they don't need to worry about being able to pay down the credit line and have it available later. Income doc type is going to be all but automatic one way or the other. While HELOCs do exist for bank statement income, the pricing is rough and a HELOAN is priced much better. If they need a P+L or DSCR 2nd, then HELOAN is the only option.
For the cookie-cutter full doc borrowers, Figure is a perfect option. Anything straying from that super simple income, there are definitely some great HELOAN products that can close in around 10-14 days as Jason mentioned.