Denham Springs, LA · Member since 2015 · 133 posts · 35 votes
I was offered a 4.5 variable rate, closing cost of around $300. The way it is amortized is a little different. If it's under 5k it's amoritized 5 years. 5 to 10k 10 years, and over 15k, 15 years.
This seems like a pretty good rate, I know some offer 2% but it's just an introductory period.
I believe I have what most banks refer to as tier 1 credit, so I qualify for their best rates. The rates go up as loan to value goes up, best rates are at 80% and increase if I go up to 90%.
So do y'all think this is a pretty good HELOC, or should I keep looking? any considerations I should think of?
Northern, CA · Member since 2014 · 674 posts · 444 votes
9y
@Jeffrey Smith@Chad C. I went through sdfcu.com. The fees were a bit high but again I didn't care, still the cheapest money available and will more than pay for itself the first time I use it. Probably could have closed in 3-4 weeks but was delayed due to shortage of appraisers in my area.
Evergreen, CO · Member since 2017 · 91 posts · 22 votes
9y
Chad Clement
I have great credit as well and recently found 4.75 variable for 80% LTV (5.25 for 90). The rate can be fixed after close for 1 point higher. No fees/closing costs if the LOC is under $100k. Payments are interest only during 10-yr draw period.
I called about a dozen banks & credit unions and this was the best I could find in the Denver area.
Mount Pleasant, SC · Member since 2016 · 13 posts · 5 votes
9y
I have a commercial heloc using a rental as collateral...75 percent loan to value and the rate is prime plus 1. On my primary residence I have 90 % LTV and the bank is secondary to my primary mortgage...but the rate is much lower...prime minus a quarter. So commercial loans are significantly more expensive in light of the fact the underlying collateral is better. They are both interest only revolving lines of credit so no amortization.
Northern, CA · Member since 2014 · 674 posts · 444 votes
9y
@Jeffrey Smith I agree, only took 1-2 hours searching. I cared less about the interest rate, I wanted max ltv because I use it to buy/sell and rehab. I replaced a 70% ltv at 5% from Wells Fargo. Combined with a newer more accurate appraisal I was able to unlock another 113k.
Northern, CA · Member since 2014 · 674 posts · 444 votes
9y
@Jeffrey Smith@Chad C. I went through sdfcu.com. The fees were a bit high but again I didn't care, still the cheapest money available and will more than pay for itself the first time I use it. Probably could have closed in 3-4 weeks but was delayed due to shortage of appraisers in my area.
Northern, CA · Member since 2014 · 674 posts · 444 votes
9y
@Marco G. it's on my primary but during my search I was also looking for terms on investment properties. I found multiple lenders willing to do 80% ltv, I might take advantage of that. I would prefer to keep most of the properties I buy using BRRRR strategy, heloc works great for this.
Denham Springs, LA · Member since 2015 · 133 posts · 35 votes
9y
@Lee S. Sdfcu offered me 1% for 10y draw. Then prime 4% after that. I guess I didn't realize they could be so low, unless I'm misunderstanding it, are they going to give me a 10 year loan for 1%?
Investor · Mechanicsburg, PA · Member since 2017 · 110 posts · 50 votes
9y
Got 2.64% introductory rate valid for a year, no closing costs, 10 year draw/ 10 year payment, upto 85% LTV. After introductory rate, it is prime - .25% with a floor of 3.99% variable (discount for payment through new checking account). Settled in 2 weeks. This is a local bank, Centric Bank, in Harrisburg, PA area. They are highly rated bank for small businesses.
Denham Springs, LA · Member since 2015 · 133 posts · 35 votes
9y
@Lee S. haha OK! They are closed now, so I will call tomorrow. But what I am finding out that it is 1% a month! I don't know how a 12% APR is attractive to an investor. I guess if they are paying off their balance each month it could be.
@Lee S. haha OK! They are closed now, so I will call tomorrow. But what I am finding out that it is 1% a month! I don't know how a 12% APR is attractive to an investor. I guess if they are paying off their balance each month it could be.
That doesn't sound right. Let us know what they say once you talk to them.
Investor · Lake Jackson, TX · Member since 2008 · 54 posts · 8 votes
9y
I have a couple questions-
1) Do the properties associated with the LOC have a mortgage or are they free and clear?
2) Are these LOC's attached to a single property, or can they be tied to the equity of multiple properties?
I am tossing the idea of getting an HELOC for quick/easy access to cash, but I don't feel I have enough equity in any one single property to justify the cost/benefit. I own 6 houses and collectively, there's enough equity to put some real work in. All the properties have mortgages and across my entire portfolio, I'm only leveraged about 50%.
Investor · Los Angeles, CA · Member since 2015 · 19 posts · 3 votes
9y
Lee S. That is a great ltv at that rate. I will be calling them today to get more info. I have a feeling the 1% is the minimum monthly payment. Is the heloc interest only during the draw period?
Also, I've done some research on LOC's on investment properties and have not found any that will do 80LTV in CA on non-owner occupied 2-4 unit properties. Mind sharing the bank if the 80 LTV lines that you mentioned are for noo multi's?
Denham Springs, LA · Member since 2015 · 133 posts · 35 votes
9y
@Greg S.@Lee S. Greg I think you are correct, 1% is the min. monthly payment. On a 20k draw your payment is $200. It's not interest only, it's 1% of principal. After draw period it becomes a fixed rate.
Investor · Los Angeles, CA · Member since 2015 · 19 posts · 3 votes
9y
Chad Clement
It was so close to being perfect. It won't work for me since i don't want to sacrifice so much of my DTI for the extra LTV.
From sdfu site:
"Owner Occupied up to a 95% LTV with a minimum loan amount of $5,000 and a maximum loan amount of $300,000. The minimum monthly payment will equal 1.0% of the principal balance outstanding or $100.00 whichever is greater."
Northern, CA · Member since 2014 · 674 posts · 444 votes
9y
yes, you guys are correct on the monthly payment. My goal was to unlock as much equity as possible, the monthly payment isn't an issue because I only use it short term (3-6 mos).
I can't remember the 80% ltv NOO heloc lenders, I was focusing on OO during my search and only made mental notes that the 80% was available.
It's not that difficult to find, I know I focused almost exclusively on credit unions, so look there first.
Investor · Los Angeles, CA · Member since 2015 · 19 posts · 3 votes
9y
@Chad C.: Correct. Unfortunately, the more complex the financial situation, the more you run into major discrepancies in how your DTI is calculated among different lenders (and even among different underwriters at the same lender). I've had my DTI calculated as low as 15 to as high as > 100 depending on the lender (and underwriter). So, I do my best to structure my finances in a such a way to minimize the risk of a lender calculating a high DTI.
Investor · Los Angeles, CA · Member since 2015 · 19 posts · 3 votes
9y
@Lee S.: I thought that 80LTV NOO Multi-unit HELOC's were common too, until i started looking exclusively for that. I've spoken to >50 CU's and banks, and NONE would do the following:
NOO,
2-4 unit,
interest only during draw period,
in CA
with a greater then 70 LTV.
There were 2 lenders in my serach that would do 80 in CA (with above criteria), but one requires for you to live in the Bay Area, and the other requires the property be in San Diego.
I have a commercial heloc using a rental as collateral...75 percent loan to value and the rate is prime plus 1. On my primary residence I have 90 % LTV and the bank is secondary to my primary mortgage...but the rate is much lower...prime minus a quarter. So commercial loans are significantly more expensive in light of the fact the underlying collateral is better. They are both interest only revolving lines of credit so no amortization.
Can you explain the commercial LOC a bit more? Do you have the mortgage in a commercial loan and they gave you a LOC on the extra equity that you have?