posted
I'm considering refinancing and have a question......
........Anybody have an equity line mortgage ? Considering this since Prime has been stable for awhile and I can get 3/4 % below prine as a rate.
Thoughts ........
-------------------- SLP#3579 LE#1533 A pair of 35th Anny drinking chairs. Every thing else is just "Fluff" Rio Grande "Swim" Coach Posts: 3091 | From: Canton Mi. | Registered: Oct 2002
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I wouldn't recommend any type of adjustable rate loan as the first mortgage on a home. There are great rates out there still and it should be fairly easy to find a good fixed rate mortgage.
Home equity loans are great though for second mortgages where you can use the money to add on to or remodel your home, fix up the yard, buy a car, mods, or whatever you wish.
-------------------- Mark H.
Whoever said you couldn't run away from your problems obviously wasn't driving an SS. Posts: 942 | From: Santa Barbara and Ventura, CA | Registered: Feb 2000
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Equity lines are great as long as you use them to build assets (i.e. improve your home) but I would never use the money to do anything else like mods for your car.
Check out www.ingdirect.com if you're interested. We have some great rates and a very simple application process.
Posts: 1762 | From: Wilmington, DE, USA | Registered: Feb 2000
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quote:Originally posted by Scott Chab: Equity lines are great as long as you use them to build assets (i.e. improve your home) but I would never use the money to do anything else like mods for your car.
Check out www.ingdirect.com if you're interested. We have some great rates and a very simple application process.
Hey Chab, lots of people use equity lines to buy cars, pay off CC debt, etc. It allows them to use the equity in their home to get cash, not to mention the tax deduction for the interest that otherwise wouldn't be deductible.
-------------------- Mark H.
Whoever said you couldn't run away from your problems obviously wasn't driving an SS. Posts: 942 | From: Santa Barbara and Ventura, CA | Registered: Feb 2000
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Went to the bank today for a few and it sounds tempting (Will not decide till after vacation).
But the short of it is with the "equity type" No closing costs with 2% below what I have now to 3.25% (prime is 4%) .I will increase the usable equity line that I have now by 40K.Keeping the same payments that I have now on my 1st mortgage to the new equity I would cut off 3 1/2 years.
-------------------- SLP#3579 LE#1533 A pair of 35th Anny drinking chairs. Every thing else is just "Fluff" Rio Grande "Swim" Coach Posts: 3091 | From: Canton Mi. | Registered: Oct 2002
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quote:Originally posted by Scott Chab: Equity lines are great as long as you use them to build assets (i.e. improve your home) but I would never use the money to do anything else like mods for your car.
Check out www.ingdirect.com if you're interested. We have some great rates and a very simple application process.
Hey Chab, lots of people use equity lines to buy cars, pay off CC debt, etc. It allows them to use the equity in their home to get cash, not to mention the tax deduction for the interest that otherwise wouldn't be deductible.
I have had an equity line for 15 years and that is what I do. I've paid it off 7 times last year alone. When I buy a vehicle (every other year) I write a check till the other one is sold.Have not had CC debt since Uncle San took the deduction away from us. Mods Sorry "NO" cash only.
-------------------- SLP#3579 LE#1533 A pair of 35th Anny drinking chairs. Every thing else is just "Fluff" Rio Grande "Swim" Coach Posts: 3091 | From: Canton Mi. | Registered: Oct 2002
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I have to side with Chab on this, (wow, someone finally agrees with him!)
An equity line can be a good tool if you can use it like a standard American Express and pay the bill off completely in a very short time before you get tagged with a lot of interest. But those types of people who actually do that, like 35th ED/ed, are far and few between. If someone wasn't making money off the deal, they wouldn't give out those sort of loans.
Gotta watch out if they're offering below prime rates, because I'll bet a dime to a donut they're going to get more out of it than that. If it's fixed, you may be ok, but check to make sure it's not fixed for 5 years, then turns variable, or some other crazy thing. Watch out for the "fees" and discount points, or stupid required insurance payments, etc. Unless the bank has a ton of liquid assets, and few do, I can't see them actually charging less than prime without some ace in the hole, because they'll pay prime to get the money themselves. Check everything before you sign. Always remember that loans are granted with the best interest of the lender in mind. Don't ever think they're handing out money because they like you. Miss one payment and that will be the true test to see how nice they are.
Biggest problem I see is that too many people think of their house as a wallet, and dip into their equity line far too often for what I consider more temporary and frivolous things.
It's your money, however, so do with it as you wish. We're in a position now where we are building a new house, and after selling this one, if we don't rent it, we should have a fairly large chunk-o-change to stash back in order to make emergency house payments for 5 or 6 years in case something happens to our jobs. Contingency plans abound to ensure we're not going to be homeless. And hopefully, when it's time to retire to Florida, the proceeds from savings, bonds, etc. and selling the now new home should be enough to build a new, smaller retirement abode and write a check for all of it. I don't like making payments, although I understand it's necessary sometimes.
Believe me, the first mortgage will be plenty big enough, let alone paying it down just to borrow more.
Posts: 577 | From: Aiken, SC | Registered: May 2002
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I will keep it short cause right now in my college education, real estate finance makes me sick. I would definitley look at all the terms and conditions first. Sometimes those "under-prime rates" are known as 'teaser rates' and will go up after a year to something even higher than normal rates. Just a thought.
By all means, if its legit, go for it! Nuttin like shaving off a couple years on a mortgage. Its AMAZING what people pay in interest for homes!! If you cut the loan down by even 5 years, you can same mucho money on interest, by upping your payments a little.
My bank (M&T Bank) offers a "CHOICEquity" which is pretty cool. You can take chunks of the line and apply it towards individual items such as cars, etc. It's pretty flexible and we're running a special next week I belevie is 2.45% (I'm not a sales rep, but can get more info if you like)
Ok, gonna shut up now....Good luck Ed!!
-------------------- 2004 Cavalier LS Sport Coupe Manual,Sunroof,16" Chrome, Zaino!!! http://community.webshots.com/user/pazbich3 Used to Drive: 2001 Camaro SS #3220 Posts: 2651 | From: Enola (Harrisburg Area), Pennsylvania | Registered: Jan 2002
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The equity that I have now is at 1/4 below prime and I have had it for years. I checked into this when it was 1st offered to us. Since the equity in the house would be going over 300K they would drop it to 3/4 below prime. Fixed 1st mortgage is at 5% now and the equity would be at 3.25%.
Frightning to think of this type of loan but how long would it take for the Prime to hit 5% the fixed rate now.I will always have the 3/4% below prime. Its just that you dont know what the government will do to the prime.
If anything were to happen the Minimum payment on a equity type loan would be $400 but with the minimum nothing comes off the principal. With the fixed the payments stay fixed at about $1000 more a month.Lot to think about.
-------------------- SLP#3579 LE#1533 A pair of 35th Anny drinking chairs. Every thing else is just "Fluff" Rio Grande "Swim" Coach Posts: 3091 | From: Canton Mi. | Registered: Oct 2002
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