All Forum Posts by: Megan Hirlehey

Originally posted by @Kimberly N.:

Also, my particular bank had $0 closing costs for me. 

Thanks, glad to hear I'm not crazy. The HELOC bank (different from shady loan guy) also offers $0 closing, just a yearly maintenance fee which is negligible in comparison to the benefits. That was another thing I was annoyed about with the equity loan, they didn't really mention it but once I got the actual paperwork and worked through it, I was paying about 10% of the loan amount just in origination fees, so that's 10% less capital to make work for me. Such crap.

@Jeff Copeland That was my thought.. If there's no balance, how do you know what interest to charge me? and if you really are going to just charge interest on the entire loan amount, regardless of the balance, then why does anyone get a HELOC anyway? Why not just get a loan every time with a guaranteed (and usually lower) rate and payment?

I applied for several loans (HELOC and Home Equity) for a deal I'm trying to do, got approved for both types, narrowed it down, decided to go with the HELOC (interest-only minimum payments for the first 10 years) for the reuse-ability and what I thought was the fact that you only make interest payments on the amount used, similar to the way a credit card works.

Wellllllll I emailed to loan company and told them to withdraw my application because I don't want that (Home Equity) loan anymore, and the representative called me to find out why. So I explained to him that I want to be able to reuse it over and over, and I may not need the LOC immediately (if the deal falls through) so I don't want to be stuck making an extra (loan) payment if I don't have an income-generating property to subsidize it. So he proceeded to tell me for like 10 minutes (despite my objections) that the HELOC people are lying and I have to not only make an interest payment every month even if I have a zero balance, but since the interest rate is variable it is a lot more risky (I know he's right about that part). For example, if the HELOC is for $50k, and the interest rate is 4%, I will be making a $166.67 monthly payment whether I've maxed out the line or used nothing at all. Well, I called BS, so after about an hour of googling it, everything I could find (all general advice, no specific bank disclosures) was a recurring theme of "One benefit of a HELOC is that you only make payments if you use it." But I'm a newb, so there is VERY good chance I've gotten this all wrong. Have I?

Does anyone have a HELOC that requires you to make a monthly interest payment (or any other payment) even if you have not drawn against the loan at all?

P. S. I also emailed the loan provider asking the same question, but it's after business hours so I don't expect an answer for awhile

To clarify the "stay on your side of the river" thing, Pittsburgh has a ton of tunnels and bridges which are the only access points to the city from about 70% of the perimeter, that bottlenecking is what generates a lot of the traffic. Because the city is located where 2 rivers meet, there's very limited access and little room for expansion (the Oakland neighborhood is considered city). Other cities may have similar problems, but this is the only "big" city I've lived in so it's the only thing I have to compare to

I love Pittsburgh, but as most locals know, traffic is a nightmare anywhere near the city. There's a joke around here that no one ever crosses the rivers (I. E. I grew up in the South hills, so I've never met someone from across the river in the north hills..) but it's true because the city is so tiny and congested compared to the metro area it's too much hassle to go through. My advice is you want to live on the same side of the river where you work, and ideally be able to avoid the parkway in your commute (I-376 east and west, I-279 north) unless you have a job where you'll be working off-hours and can avoid commuting during rush hour For example, distance-wise, I live about 2-3 miles from Oakland (I'm right across the river in the South Hills), but travel time can be easily an hour with traffic. I wouldn't recommend living anywhere in the South hills and working in Oakland (which is why Shadyside and Squirrel Hill are so pricey, much easier access to the downtown areas). Point Breeze is right next to those neighborhoods but at a much lower price point. Greenfield, as mentioned is about the same access but significantly more affordable as well. Good luck!

I just checked their website, it looks like Paranzino Bros is actually all over the tri-state area (PA, OH, WV) as well as Michigan, Maryland, and Florida

I've found tons of gems at the builder's auction (the company that does them in my area is Paranzino Brothers, they are right across the border from me in Ohio http://www.pbauctions.com ). Got a 17-Pc brand new kitchen cabinet set for $1600 one time, brand new washer and dryer for $400 another time, ceiling fans as low as $20-30. You just have to be careful with the fees, and make sure you are factoring them in to the overall OTD price when you're bidding. Also, from what I remember, everything is You-haul so we always bring at least a pick-up truck, sometimes a trailer as well, depending on what we're looking for (I think they give you like a week to come back and pick up your purchases if you can't take it the day of).

Ideally what I was thinking is I'd like the HELOC so I can refinance the house after about a year and then have the HELOC to use again for another purchase, as opposed to the loan which I'll have to keep replaying for

I'm in the process now of deciding between a HELOC or home loan against the equity in my primary residence (100%) to buy my "first" investment property. I'd prefer the HELOC because it's "reusable" but the variable interest rate worries me given the current rate environment. I got approved for a loan with Quicken that is essentially an FHA refi, so not reusable like the HELOC, but the interest rate is almost a full percentage point lower, which adds about $100/mo in cash flow by my calculations if I rent it out. Said loan has pretty high fees though (almost 10% of the loan amount) which I'm annoyed by when a HELOC has no fees. Both the HELOC and the loan have no prepayment penalty though, which is good. I'm torn between the higher rate but the added benefit of flexibility and reuse-ability of the HELOC, or the lower, fixed rate and increased cash flow of the loan.. thoughts?

After looking through the official approval of the home loan that I thought was a really deal, after all the closing costs and fees, the available spending amount is actually about what the Available spending balance of the HELOC will be, which is a bit tight for my budget