Realtor · Southern NJ · Member since 2017 · 188 posts · 68 votes
5y
Hi Alana. HELOC's are great tools. Just be careful that if it's on a property in your name (like your home), it will report to your personal credit. Not an issue having it, but once you start to use it, it will impact your DTI.
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
5y
Not much bad I have found. We just closed on one for $250k. More would have required a full appraisal, costing about $900 (2-family) and delaying the process about a month. For another $50k in credit (we originally applied for $300), we didn't feel it was worth the time or $.
Rate. 3yr fixed rate 4.3%. After 3yrs it will be indexed to the WSJ + 1.05%, quarterly. The quarterly rate (had to choose qtrly, 3yr or 5 yr when we applied) was 3.9% so the small premium for certainty was worth it to us. The 5 yr lock rate was 4.75%.
Closing costs. Because we went with the banks desktop in-house appraisal (for $15) our total closing costs were $665. Most was reconveyance and title insurance. A refi would cost at least $3k.
Annual costs. $50/yr whether we use it or not. My last line with this bank limited free transactions to 6 per month. We never came close to that, so the insta-transfers to our acct costed us just the $50 per year.