Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
Does anyone have a recommendation for lenders doing 1st mortgage HELOCs on investment property in SC (Greenville and Upstate SC)? I know lenders who do closed end HELoans on investment property but not HELOCs. Residential only please...I'm familiar with what's available on the commercial side.
I would contact Mike at Replaceyourmortgage.com
He has done the research and can tell you
Negative, there is no place for mortgage acceleration scams on BP. And you don't need to research simple interest...it's simple.
If you don’t want answers you should stop posting questions. There is no scam and I find it appalling that you want to deny math.
If you can show how you get access to equity in your simple interest universe where the lender requires you to spend the vast majority of your monthly payment on your amortized mortgage to cover interest, I would be happy to hear how.
Otherwise I suggest you stay away from the word scam - or maybe you read up on how houses in Australia and the UK are financed. I am sure those governments don’t support scams but they know math.
Amortizing Loan Interest Per Day = Principal x Rate / 365 Days
HELOC Interest Per Day = Principal x Rate / 365 Days
$100,000 x 5% / 365 days = $13.70 interest per day (both loans)
Amortizing loans and HELOCs do not accrue interest differently.
The HELOC has nothing to do with the acceleration of the mortgage pay down. Saving money and paying down the mortgage early is what accelerates mortgage pay down. The HELOC is completely irrelevant and that's the scam.
Amortizing Loan Interest Per Day = Principal x Rate / 365 Days
HELOC Interest Per Day = Principal x Rate / 365 Days
$100,000 x 5% / 365 days = $13.70 interest per day (both loans)
Amortizing loans and HELOCs do not accrue interest differently.
The HELOC has nothing to do with the acceleration of the mortgage pay down. Saving money and paying down the mortgage early is what accelerates mortgage pay down. The HELOC is completely irrelevant and that's the scam.
Simple interest is not a matter of opinion.
Hey Mike,
I posted a google drive link here but I guess its against forum rules so it was taken down. Basically, during my research to get a HELOC I created a short list with the different features, cost, LTV, etc.Thanks,
Rental Property Investor · Escondido, CA · Member since 2017 · 679 posts · 550 votes
8y
Mike, most people investing in investment properties like to combine like to combine leverage with portfolio- building.
If you finance traditionally you have the majority of interest to pay first and, as you stated, can only accelerate that by paying extra. Even if you pay extra you still don’t get to the equity of the property that you have paid down, however minimal it may be in the first few years.
With a HELOC you can get access or decide to delay the repayment. If you were to decide to accelerate for some time, i.e paying your positive cash flow as extra principle for some years, you still can’t get to that money or any appreciation in your house unless you refinance.
With a HELOC, you have that flexibility all the time.
Calling it a scam is inappropriate. You asked for lenders that offer it.
If you don’t like it or deem it a scam, you can stay away from it.
It’s an instrument that serves people with a specific payment and investment intention.
If you rather have high closing costs and no access to equity, that’s totally your choice. In return you typically get slightly lower and fixed interest.
Mike, most people investing in investment properties like to combine like to combine leverage with portfolio- building.
If you finance traditionally you have the majority of interest to pay first and, as you stated, can only accelerate that by paying extra. Even if you pay extra you still don’t get to the equity of the property that you have paid down, however minimal it may be in the first few years.
With a HELOC you can get access or decide to delay the repayment. If you were to decide to accelerate for some time, i.e paying your positive cash flow as extra principle for some years, you still can't get to that money or any appreciation in your house unless you refinance.
With a HELOC, you have that flexibility all the time.
Calling it a scam is inappropriate. You asked for lenders that offer it.
If you don’t like it or deem it a scam, you can stay away from it.
It’s an instrument that serves people with a specific payment and investment intention.
If you rather have high closing costs and no access to equity, that’s totally your choice. In return you typically get slightly lower and fixed interest.
If you want access to equity, get a HELOC. People do that all the time...I have one.
But the HELOC has nothing to do with the accelerated pay down of an amortizing loan. The scam is tying the two together and charging a fee. And mimicking the scam for free does not make it work. Saving more than you spend does...and the HELOC is irrelevant.
Columbia, SC · Member since 2014 · 133 posts · 190 votes
8y
@Will Gaston I get asked this all the time too and haven't found a good answer. We don't do it at my bank and even so much as "second homes" don't count if there's any rental income. It's gotten me curious though so I've asked a couple of banker buddies at different places to see if they do them or refer to another bank and I'll post my answer when I get it.
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
8y
@Chad Hensel I spoke with CresCom and unfortunately they do not do HELOCs on investment property.
@Daniel Rutledge Ped Fed, US Bank, and other community banks do them in other states...it's just not common in SC. You can get closed end HELoans in SC.
Columbia, SC · Member since 2014 · 133 posts · 190 votes
8y
So supposedly, TD Bank does do HELOC loans on investment property at lower LTV (75%) - honestly I assumed the smaller ones would be more likely but this came from a branch manager locally and she verified what someone else told me. @Mike Dymski@Will Gaston
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
8y
Thanks @Adam Odom. I talked with TD earlier this week and am waiting to hear back from them. I am a long time TD customer, former employee, and currently have two mortgages with them. Their mortgage products have historically been very good and their mortgage process has been worse than awful.
Their web site has Prime +1.74% for the rate, which makes commercial lines more competitive.
You may want to read this one. I just spoke with a branch manager at UCBI and they will do HELOCs on single family rental properties...they treat them like second homes. 70% LTV, no closing costs, 2.75% promotional fixed rate for year 1, Prime - 0.25% after that for top tier credit, 10 year draw, penalty for closing within 3 years. Wow. Their web site says no rental properties but the branch manager told me otherwise. I don't know if they will do more than one "second home".
You may want to read this one. I just spoke with a branch manager at UCBI and they will do HELOCs on single family rental properties...they treat them like second homes. 70% LTV, no closing costs, 2.75% promotional fixed rate for year 1, Prime - 0.25% after that for top tier credit, 10 year draw, penalty for closing within 3 years. Wow. Their web site says no rental properties but the branch manager told me otherwise. I don't know if they will do more than one "second home".
I have MF; so, it won't work for me.
Mike - Thanks for info. Do you have the branch manager name or at least which branch?
You may want to read this one. I just spoke with a branch manager at UCBI and they will do HELOCs on single family rental properties...they treat them like second homes. 70% LTV, no closing costs, 2.75% promotional fixed rate for year 1, Prime - 0.25% after that for top tier credit, 10 year draw, penalty for closing within 3 years. Wow. Their web site says no rental properties but the branch manager told me otherwise. I don't know if they will do more than one "second home".
I have MF; so, it won't work for me.
Mike - Thanks for info. Do you have the branch manager name or at least which branch?
Boiling Springs branch. I just sent you the contact information. Let us know how it works out.
Charleston, SC · Member since 2017 · 10 posts · 11 votes
7y
Update in July 2019--UCBI at the Charleston Branch does not deal in HELOCs for investment properties (Orleans Road branch is who I talked to--but their rates were prime minus for primaries and very competitive after that promotion), BUT TD bank in Charleston does. On my single fam rental, they quoted 75% LTV at prime plus for a 10 yr (interest only) draw period and a $99 origination fee instead of closing costs. This is the same as my HELOC on my primary. Been looking for this for a while and don't know why I didn't see this post before.
Also worth it to note that I just closed on a quad using the HELOC from my primary. Still cash flows even after the overhead of paying the interest only payment. Anyone do this in the Charleston area and have any feedback?
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
7y
@Daniel Vella What is the rate? Last time I checked, rates on TD's investment HELOCs were really high...P+2% (0.25% less with a checking account). Commercial lines have lower rates. And TD's mortgage process is ridiculously awful.
Charleston, SC · Member since 2013 · 380 posts · 157 votes
7y
I just saw this thread and while I haven't been looking for a HELOC on investment property lately, I do know that I have one currently through Southern First Bank with a 6.5% rate. TD was higher last time I looked. I work with Kevin Lee at Southern First.
I just saw this thread and while I haven't been looking for a HELOC on investment property lately, I do know that I have one currently through Southern First Bank with a 6.5% rate. TD was higher last time I looked. I work with Kevin Lee at Southern First.
I spoke with Southern First in Greenville and they don't do HELOCs on investment property here, just commercial lines.