Investor · Austin, TX · Member since 2013 · 21 posts · 6 votes
I am looking to purchase a house in austin and found an assumable VÁ loan that would give me about a 3.25- which is great- but i would have to finance the remaining 400k price difference - and with only 100k cash to throw in, leaves me with looking at 300k heloc to pull from my other house.
(820 purchase- 420 assumable-100k cash - need 300 heloc)
I have seen the lowest helocs at 7.8 but go up to 9 or 10 which would kind of defeat the purpose of the assumable loan.
Anyone know of any credit union 5% heloc and not just 6 month intro offer?
I’m thinking a conventional in the 6’s might make more sense if I can’t find a decent heloc rate.
Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
3y
Good Morning, I've been a lender for 32 years...much of that time serving as a bank executive, so I can help answer this. The problem we run into with finding a bank with a rate that low is that, contrary to what people think, rates aren't arbitrarily set. There is a reason that lenders set the rates where they do. The Federal Funds Rate is the interest rate at which banks can borrower ultra-short-term (overnight) funds from other institutions and government sponsored enterprises. The Federal Reserve's Open Market Committee sets that rate. When you hear on the news that they are raising interest rates, this is what they are referring to. Banks then need to mark that up to cover things like risk premiums, etc. That's how we get our HELOC rates. Currently, that Fed Funds range is 5.00% to 5.25%. The Wall Street Journal's publised Prime Rate, the variable rate reserved for top customers is at 8.25%. One year ago it was at 4.75%. Unless you're seeing a "teaser rate" to get you in the door, no bank right now is able to sustain a a rate in the 5% range.
Investor · Austin, TX · Member since 2013 · 21 posts · 6 votes
3y
Thank you. Yes, that's what I thought...I saw some with a teaser 6 month intro then bumped up to high 7 or 8's after.....the ones I did see from google search were from old ads not updated in like two years, lol.