Recently tried to take a credit line from an investment property that is paid off. For heloc was being charged $3000-$6000 in closing and title fees- is this typical?
If not, what companies are the best companies to reach out to get cash out and refinance ??
@Saira Ahmed I think it just depends on the company. I don't think I have heard a HELOC cost that much but then again I do finance them.
Between escrow/impound collection of taxes and insurance, origination fee, title costs, appraisal, and any other 3rd part fees they can add up quite a bit. How much were you trying to take out and what's the value of your homes?
Hey thanks for the response! Our home is worth $220k, paid off- it’s a rental. And we are trying to take out $150k so we can purchase 1-2 more rentals. The fees are coming to around $6000. I was not sure if this is normal? I have taken heloc out in the past on investment properties and primary home and don’t recall having to pay these fees?? Any insight is much appreciated .
@Saira Ahmed on a regular refinance cash out and not a heloc you could expect a 5.125% for a 30 y fix, no origination or discounts. Closing costs apron $1100-$1700 lender fee (underwriting & processing), $450-$650 for appraisal (including the rent schedule) and $800-$1500 title (pending in what state you are). Escrow is optional since you are below 80% LTV
@Saira Ahmed my first and foremost advice would be to figure out what the fees represent. The key things I am assuming for this is you have a HELOC taking first lien position on a home that is free in clear. SO it is kind of like using a HELOC as a mortgage. They are might be requiring you to escrow taxes and insurance with them (maybe) and thus are collecting 2-3 months upfront. It's not a normal HELOC because it's not a second mortgage on the property, it's a first.
What state are you in?
Thank you i am in jersey. So they are charging $3750 for origination fees, $1500 title fees and $600 for appraisal and miscellaneous-
Ty! So they are charging $3750 for origination, $1500 for title fees and $600 appraisal and other miscellaneous fees - no escrow is included in this
@Saira Ahmed if you want to price a Heloc call Pen Fed. They do 80%LTV on rentals at a variable rate of prime + 1% if you have 3 properties or less including your primary, if you have 4 properties including a primary they will only do a Heloc on your primary. 12 year draw, you choose p/i payments or i/o. No closing costs unless you need a site visit appraisal and if you close it within 2 years they back charge the 3rd party fees that they cover in setting it up ($500). Refi is best if you plan to use the funds for longterm like down payment on more property. Heloc might be better if you need shorter funding (ie flips, brrrr, etc.).
Updated about 2 years ago
*Rental property must be in your personal name no in an LLC to get a Heloc with Pen Fed.
@Saira Ahmed that's 2 points for originating...seems kind of hefty for a HELOC. But then again I don't have anything to compare them too since in Texas there are a little bit stricter rules for them.
What kind of rate are they giving you?
Maybe take Brian's advice and look into Pen Fed and see what they have to offer. There has to be something better than that. What kind of rate are they giving you?