I need to pick a bank for a HELOC

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I need to pick a bank for a HELOC

Daniel Devin Jewell
Flipper/Rehabber · Charlottesville Virginia · Member since 2019 · 39 posts · 9 votes

Okay guys I need help!!

Basically I'm trying to decide the pros and cons of what bank to use for a home equity line of credit.

I'm going to lay it all out so bear with me

I work in real estate full-time as a boots-on-the-ground resource for other investors.

3 years ago I started to realize I needed to pay more taxes in order to qualify for loans.

2021 was the golden two-year mark where I had a increased self-employed income so more banks will start looking at me before this it was extremely hard being that I was self-employed.

I own a house near Charlottesville Virginia I refinanced it and the appraisal came back at 270k with a mortgage on it for 125k so about 140k inequity.

I approached several Banks UVA Credit Union and truest / bb&t are the two that responded favorably to me.

They both have approved me pending a appraisal and title search.

The bottom line is UVA Credit Union called me earlier today and I gave them to go ahead to proceed assuming that the other was just dragging their feet they offered me a 75 k line of credit with an interest rate of 2.8% for the first year and then 1% above Prime for 10 years and then it will convert to 20 years.

Truist / bbandt called me 10 minutes ago and offered me 100k with interest-only payments starting at 5%. they also offer a draw program where if I was to pull out X amount of money we can lock a rate in and amortize that over however many years, up to 30.

I've got big plans for this money!

my plans will work with 75 but 100 is 100. should I be concerned with one or the other closing or not closing?

should I make it just about the money?

or should I take relationships into account like the fact that my LLC has an account with the UVA Bank or the fact that bbnt is a national brand and I am much more likely to be treated like a number to them but it'll be easy for me to operate in other states which I do regularly.

I've never used a home equity line of credit any advice is appreciated.

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Scott Myers
Realtor · Yorktown, VA · Member since 2014 · 4 posts · 5 votes
4y

Go back to your CU and tell them another bank is offering you $100k.  Everything is negotiable

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21 Replies

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  • Scott Myers
    Realtor · Yorktown, VA · Member since 2014 · 4 posts · 5 votes
    4y

    Go back to your CU and tell them another bank is offering you $100k.  Everything is negotiable

    4Reply
  • Bob B.
    Investor · Jasper GA · Member since 2015 · 1k+ posts · 1k+ votes
    4y

    Go with the credit union.

    1Reply
  • Edith Scott
    Member since 2018 · 10 posts · 2 votes
    4y

    @Daniel Devin Jewell Hi.

    curious if your CU is requiring that you have a certain % in reserves.

    The two CUs I've been working with are asking for proof of 10/20% in reserves on a 60k HELOC on an 85% LTV deal.

    Thanks and best luck.

    0Reply
  • Alex Talcott
    Attorney · Durham, NH · Member since 2019 · 292 posts · 126 votes
    4y

    Third Federal (Cleveland OH) -- I'm in NH -- has improved its customer service. A HELOC is my one product with them.

    1Reply
  • Tom Fisher
    Rental Property Investor · Charlottesville, VA · Member since 2016 · 45 posts · 39 votes
    4y

    We're long time UVA CU customers and love its regional/local base. I agree with Scott Meyers, too.

    1Reply
  • Daniel Devin Jewell
    OP
    Flipper/Rehabber · Charlottesville Virginia · Member since 2019 · 39 posts · 9 votes
    4y

    So basically what I'm hearing from you guys is go with the credit union, but try to negotiate the credit line up

    Scott Myers
    Bob B.
    Edith Scott
    Alex Talcott
    Tom Fisher

    0Reply
  • Daniel L Mills
    Rental Property Investor · Charlottesville, VA · Member since 2018 · 7 posts · 7 votes
    4y

    I have a property in Charlottesville that I got a HELOC on through Tower Federal Credit Union in DC. They offered a credit line up to 100% of equity with interest only payments for the first 10 years with 1% over prime being the rate.

    I can't tell you who to go with, but either way it seems you might be able to get better terms than what you have initially listed.

    1Reply
  • Tom Fisher
    Rental Property Investor · Charlottesville, VA · Member since 2016 · 45 posts · 39 votes
    4y

    They will order an appraisal to determine the value of the property. Your HELOC will be determined based on what you owe and a percentage of your equity. Don't sweat the details, just tell them you have better rate from Truist, but you prefer to do it with them and see what they say. Keep us posted!

    1Reply
  • Tom Fisher
    Rental Property Investor · Charlottesville, VA · Member since 2016 · 45 posts · 39 votes
    4y

    They will order an appraisal to determine the value of the property. Your HELOC will be determined based on what you owe and a percentage of your equity. Don't sweat the details, just tell them you have better rate from Truist, but you prefer to do it with them and see what they say. Keep us posted!

    0Reply
  • Daniel Devin Jewell
    OP
    Flipper/Rehabber · Charlottesville Virginia · Member since 2019 · 39 posts · 9 votes
    4y

    Thanks everybody for their input I'll keep you guys posted on how things progress

    0Reply
  • Justin Lavoie
    South Windsor, CT · Member since 2021 · 8 posts · 2 votes
    4y

    @Daniel Devin Jewell Hey Daniel, mind if I ask what you're doing with the heloc?

    0Reply
  • Chris LumLee
    Investor · Honolulu, HI · Member since 2017 · 187 posts · 108 votes
    4y

    @Daniel Devin Jewell

    I'm surprised. Last year I posted something similar to this and @Michael Sato messages me and tells me my post got taken down because soliciting lenders and recommendations, etc. is a form of advertising. Then he tries to push a book on me.

    0Reply
  • Daniel Devin Jewell
    OP
    Flipper/Rehabber · Charlottesville Virginia · Member since 2019 · 39 posts · 9 votes
    4y

    @Justin Lavoie do I mind!!?? Lol isn't that the point of this platform?

    I plan to do basically brrrrs, as my first choice.

    There are a few investors that I work with that are obsessed with cash flow and they regularly find properties for under 40K that will rent for 1K maybe 1.5 in today's climate.

    As a whole Iv found that a lot of lenders will not lend anything under 100k and they won't land on manufactured housing.

    Some of them do require seasoning time But I don't feel like that's a big hurdle

    so my plan is to find one of those properties for under 40K that will appraise for a minimum of 100K Plus.

    I'm capable of doing all the work myself and do it for other investors regularly so in the worst case scenario my rehab will cost around 20K Maybe 30k.

    in my eyes if I find a property for 50k and have to put in 30k worst case scenario, then I will still potentially make some kind of profit on my refinance, not to mention having a cash flowing asset afterwards.

    I do not want to do this long-term but if I get a few of these rental properties it'll enable me to take a step back and really focus on the things I'd like to do, like development of manufactured housing instead of flips or other things.

    If I can't find those properties then I can always lend out the money and start developing relationships with other investors or partner on a flip with somebody.

    it just opens a lot of doors for me.

    I've got savings but having 50 or 100k can make a difference, it puts me at a different table

    Hopefully that makes sense

    0Reply
  • Daniel Devin Jewell
    OP
    Flipper/Rehabber · Charlottesville Virginia · Member since 2019 · 39 posts · 9 votes
    4y

    @Chris LumLee I'm sorry to hear that. maybe they picked up on certain phrases for sentence structure.

    not that BiggerPockets is that big of a site but an algorithm can only do what you tell it to do specifically.

    I worked in robotics and programming while frustrating was humbling because if it's not doing something right then it's 100% on you. If you did not tell it to move two degrees to the left instead of three it's, just.

    0Reply
  • Justin Lavoie
    South Windsor, CT · Member since 2021 · 8 posts · 2 votes
    4y

    @Daniel Devin Jewell lol, I'm new to the site and new to real estate investing but that definitely makes sense. Thanks for explaining and best of luck to you with your projects!

    0Reply
  • Kevin Phu
    Rental Property Investor · San Diego, CA · Member since 2016 · 507 posts · 171 votes
    4y

    I'm looking for open a HELOC on my primary and am looking for recommendations as well. Looks like I definitely should start with my local credit unions here in San Diego. Thanks for the info in this post!

    0Reply
  • Mark Frattini
    Real Estate Agent · San Diego, CA · Member since 2014 · 338 posts · 176 votes
    4y
    Quote from @Kevin Phu:

    I'm looking for open a HELOC on my primary and am looking for recommendations as well. Looks like I definitely should start with my local credit unions here in San Diego. Thanks for the info in this post!


    If you need a local lender referral for San Diego give me a shout.
    0Reply
  • Aaron HowellBusiness Member
    Real Estate Agent · Crozet, VA · Member since 2014 · 436 posts · 223 votes
    4y

    Check with Bank of the James.  They were offering 100% equity lines of credit at one point for high net worth individuals.  They are slow in their process I'll warn you up front.  

    Story House Real Estate529 Reviews
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    0Reply
  • Lynne Burke
    Member since 2021 · 21 posts · 9 votes
    4y

    I'm struggling with this as well amd have all but given up on a HELOC. I can't find anyone who will look at current 1099 earnings, rather than averaging the last 2 or 3 years (we started in real estate mid-2019). Frustrating.

    1Reply
  • Daniel Devin Jewell
    OP
    Flipper/Rehabber · Charlottesville Virginia · Member since 2019 · 39 posts · 9 votes
    4y

    Hey everybody!! just an update.

    I just closed a home equity line of credit with truest / BB&T. They ended up giving me 100k hahahaha

    I closed on the HELOC today at 12 and I've been riding a pretty big high ever since. I've been working towards this for the past 3 years and it's just a little weird seeing myself get it done.

    Basically three years ago I realized that if I wanted to do things faster in real estate id need to do financing.

    so I started to pay attention and claiming everything I could when it comes to my taxes. I didn't deduct everything because it would lower my income and after doing this for 2 years and being self-employed I started to qualify.

    after the 2 years of taxes I planned to refinance my primary residence at today's rates. I got 2.8% or something like that and then to get a HELOC on the remaining equity.

    my plan is to basically use this line of credit to buy houses that are extremely undervalued probably in Virginia North Carolina South Carolina… basically Virginia's sister States. I find houses that are selling for under 60k regularly and in most cases will appraise for 120k. my plan is to buy them with my line of credit fix them and finance out after it's rented.

    1Reply
  • Aaron HowellBusiness Member
    Real Estate Agent · Crozet, VA · Member since 2014 · 436 posts · 223 votes
    4y
    Quote from @Daniel Devin Jewell:

    Hey everybody!! just an update.

    I just closed a home equity line of credit with truest / BB&T. They ended up giving me 100k hahahaha

    I closed on the HELOC today at 12 and I've been riding a pretty big high ever since. I've been working towards this for the past 3 years and it's just a little weird seeing myself get it done.

    Basically three years ago I realized that if I wanted to do things faster in real estate id need to do financing.

    so I started to pay attention and claiming everything I could when it comes to my taxes. I didn't deduct everything because it would lower my income and after doing this for 2 years and being self-employed I started to qualify.

    after the 2 years of taxes I planned to refinance my primary residence at today's rates. I got 2.8% or something like that and then to get a HELOC on the remaining equity.

    my plan is to basically use this line of credit to buy houses that are extremely undervalued probably in Virginia North Carolina South Carolina… basically Virginia's sister States. I find houses that are selling for under 60k regularly and in most cases will appraise for 120k. my plan is to buy them with my line of credit fix them and finance out after it's rented.


    Story House Real Estate529 Reviews
    WebsiteView Page
    0Reply
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