Info Requested on Home Equity Loans

Hi Paula, I used to be a loan officer as well at Bank of America so that is the only point of view I can give you.

1. Home improvement loans are very picky about how much you can take out, based on home value, cost of work being done and kind of work being done (pool, addition, kitchen makeover). You have to be sure this work is all the work you are gonna want to do b/c if you want to do more later and need another loan you have to do it again. Personally, these were my least favorite to work on b/c of all the paper work needed from contractors and stuff like that.

2. Home equity loans are for a set time, one time only loan, lump sum check. You need to be sure that the amount you are asking for is all you are going to need b/c you have to start over and combine loans to get more (kinda confusing, definitely time consuming, not real costly but could be if rates change and your original loan had a lower rate, and you may not be able to get reapproved if you try to do them too close together). These are easy to work with b/c it is cut and dry, but you can't use the same loan more than once and your loan is that original amount so if you don't end up using it all you are paying for it anyway.

3. My customers liked the HELOCS b/c you can access them easily (with checks, in the bank, online I think, or with a card), you can use them for a greater variety of needs, there were no fees when I was doing this a few years ago, if you pay it off it doesn't close and it is available later if you need it again for something else. Yes the rates are higher b/c of the risk, but if you are responsible and pay it off in a timely manner it can be more cost/time effective. The loan stays open for like 20 years or till you close it/sell the house.

Just kinda depends on your financial responsibility and needs as to which one will be better for you. You can do all of these no matter where your original home loan is. Any bank, if they (or should I say the associates) are good, will try to win your business and ask you to refinance with them so be prepared for that when you go in and be familiar as to your current loan specifications (amt, length, interest rate). I don't know if you know how much you have invested in your home and how much you can take out but there are calculators at BOA.com to help you figure that out before you go in to talk to an associate and also info as to the differences, etc. of the loans.

Good luck, hope this helps, let me know if you need more and I will try to dig deeper and let you know what I can remember.

Go to your bank. I bank with Compass Bank and they gave me a home equity line of credit. That way you only use what you need when you need it and it works like a credit card. I don't remember what the fees were, but I did not have to have my mortgage with them.

Jodi

Hi Paula,

I am a bank manager for Chase Bank...a Home Equity is a great way to improve your home, pay off credit cards etc. Make sure you do not pay any fees and remember most people can write off the interest just like the interest on your mortgage. Get a second opinion about refinancing your mortgage...as long as you have Equity you shouldn't have to. Let me know if you have any questions.

Definitely look into a cash-back refinance which can lower your current mortgage payment and give you the money you desire for home repairs. HELOC's are tricky and can cause high payments if your rate skyrockets.