If you’re a homeowner looking to purchase a new property, you may be able to use a home equity line of credit (HELOC) as a down payment. In order for this to work, your current property must have a significant amount of equity (usually at least $20,000 worth). If you are planning to sell your [...] [...more]
Many home equity lines offer an interest-only feature. Interest-only HELOCs are risky to the borrower; however they do provide more manageable monthly payments during the first few years. Here’s how these credit lines work: First – The interest-only HELOC is opened. The borrower agrees to a set number of years for the withdrawal period and [...] [...more]
As HELOC rates have nosedived, average rates on home equity loans have gone up. Some HELOC customers have suffered through line freezes and reductions, but many others are taking advantage of the low rates made possible by federal funds slashes earlier this year. Here are the national overnight averages calculated by Bankrate.com: $30,00 HELOC – [...] [...more]
Over 400,000 HELOC borrowers have had their lines reduced and HELOC lenders are more unpredictable than ever. What’s the reasoning behind this recent instability? HELOC lenders have lost more money on these loans than ever before. Although home equity lines make up a small percentage of the mortgage market, their loss hits banks harder because [...] [...more]
If you’re a homeowner, it’s important to stay aware of mortgage scams such as HELOC identity theft. According to a recent Consumer Affairs article, home equity identity theft has become increasingly common. Here’s how the scam works: “Some con artists steal consumers’ identities to drain Home Equity Line of Credit (HELOC). These HELOC loans differ [...] [...more]
One fact is clear from the past few months: home equity lenders are extremely unpredictable. Because of declining property values, many HELOC clients have had their lines frozen or decreased. It’s hard on borrowers, but it makes financial sense for the banks. However, HELOC lenders haven’t stopped at that. Many customers have been surprised to [...] [...more]
Washington Mutual just finished sending out the last of their HELOC freeze notices. The damage: customers have lost the opportunity to draw on $6 billion from home equity lines. We reported on this story earlier, but the total extent of the line freezes was not known at that time. Housing Wire explains the latest: “Washington [...] [...more]
Over the past four months, we’ve been keeping a list of major lenders sending out home equity line freeze letters. To date, an estimated 400,000 HELOC freeze notices have been sent and we receive information about new line freezes almost weekly. Here’s the latest update. Lenders Freezing Home Equity Lines of Credit Countrywide (recently froze [...] [...more]
Washington Mutual customers may want to keep an eye on their mailboxes this week, as more HELOC freeze notices are on their way. According to the San Francisco Business Times, WaMu is sending out an undisclosed number of new line reduction letters: “Washington Mutual, Inc. has slashed or suspended $6 billion in available home equity [...] [...more]
Now that HELOC lending standards have become tighter, prospective borrowers may want to consider working with a mortgage broker. Mortgage brokers can’t change the standards set by banks. But, they can explore a variety of lending options with you and advocate on your behalf. The Problems of Working Directly with a Lender When you go [...] [...more]
