How long does it take to refi out of a HELOC? Any obstacles?

Question

How long does it take to refi into a home equity loan from a HELOC? What should I watch out for?

Tom Gimer · Answer

It's about LTV rather than the number of loans.

You mentioned refi-ing out of your HELOC into a fixed rate loan. But since you also wanted to keep the line of credit... my answer suggested how to get that done. Often that is with the new loan being a first (structured like I described), but not always. You'll certainly find more lenders wanting to lend in first position.

Regardless, the new loan would need to be large enough to pay down the HELOC while also meeting the lender's guidelines for whatever lien position they were taking.

I'm no lender... I just deal with them a lot. Hope this helps.

Tom Gimer · Answer

@Patrick Martone

If you refi out of your HELOC, your line of credit will be closed and you will no longer have access to it.

If you have a bunch of equity in the subject property, you could ask the bank to increase the line OR or you could get a new first and at the same time pay down and subordinate the HELOC.

Patrick Martone · Answer

Hmm,  I'll have to double check, but the fine print mentioned something about getting up to 3 fixed-rate loans. it seems common across different institutions.

Patrick Martone · Answer

Theres a home equity line of credit and a home equity loan. One is a fixed rate, the other isn't. you can refinance out of the credit line and into a fixed rate loan (home equity loan). I think different banks have different names sometimes.

Either way, I want to be able to refi out and get my credit line back to make another purchase. Before that I want to know the obstacles. I have a low debt to income ratio, but I am also going to retire which may affect the approval process (even though I can still make the payments.)

Brent Coombs · Answer

@Patrick Martone, a HELOC is (already) a Home Equity loan!

What are you getting at? [Sorry if I missed something obvious]. Cheers...

How long does it take to refi out of a HELOC? Any obstacles?

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