HELOC with Credit Union- What to expect

[Lolita Ellis]

I applied for a a HELOC with my credit union- the rep has been really "laid back"- that said I finally had the title company send me the docs to review prior to signing but here is what they offered: max amount allowed $81k at 4.65% to adjust quarterly, not to exceed 18% for 15 years. At the end of the 15 years a balloon. I had a plan for the HELOC- not to be complete failure when I start out. What are your thoughts?

[Daria B.]

Originally posted by @Lolita Ellis:

Purnell C. - I planned to pay off immediately as planned but keep it open as a resource

Daria B. - I did shop around was going to go with Navy but they offered a 6.9 with a 20yr draw, I never received an other info as far as Cap rate etc., because I figured Hoya FCU would probably be super competitive since they are smaller and holding my cash. Navy closed my application because I told the processor I wanted to compare with another CU. so I was denied for not completing submittal of docs

Is it typical for them to provide you with a schedule on helocs? Balloon payment info even if they dont know the amount you will owe at that time? What about those quarterly changes? Do most HELOCs have a recision period? Are they suppose to tell me the date of my first change date? Are there other fees I should be concerned with?
I know HELOCs differ from 1st mortgages also not protected under CFPB rules so me also being a housing counselor- im treading this water super slow- where most might jump in. Its taken me way to long to get here and turn around. I have been "working" on this since April. **side eye**

 Hi Lolita-

I shopped around a lot when I was trying to "figure this all out" and get a HELOC that would satisfy my investing. Not sure what you meant by "schedule of HELOCs"? If this is meant to be that they give you all the ins/outs of the HELOC like the rate and terms such as years for draw and payback, then yes they should be telling you about what they offer in their products.

When I finally decided on mine there was only one thing that the lender was not forthcoming about and I don't believe that was on purpose. We discussed a their product in great detail. She was willing to listen and answer all my questions. By the way she was the Assistant VP of the branch that I called and she stayed with me from the beginning of my call and all my questions to my going into the branch to finalize the  papers. We did the application and all docs via electronic means.

What I ended up with was a HELOC that had 1.99% interest for the first year and then prime + their internal rate (based on my credit score) for any remaining draws. So in essence, my first year rate was an incentive to get the HELOC. I can draw for 10 years and then if there is a balance I have to pay it back and cannot draw any funds. They will however amend the agreement or it's a new agreement to extend the 10 years. For some reason all banks had this 10 year draw then payback. I did not pay for the appraisal of my home because part of the agreement was to keep the HELOC for 2 years. Something that other banks wanted was 3 years and that was just 1 year too much. This means that I must keep the account open for 2 years + 1 day in order to not pay the closing costs of the HELOC, which really just consisted of the appraisal that was done.

I use it like a credit card in that if I don't pay the full principal + interest of that month(s) then the interest is carried forward with the next months interest. If can pay some monies on it but still it's like what a credit card would impose. If you don't pay the credit card amount for the months charges they will tact on additional interest based on the principal draw.

As far as a amortization schedule, you can search the internet for any site that has a mortgage calculator to see what the draw and interest payment would amount to for the term (10, 20 yr, etc). 

I'm not sure if this answered your question(s), if it was too much, not enough but hopefully by my example of what I received when I got my HELOC it will help.

What is CFPB?

Good luck......