Selling and Buying? Here's a quick tip

[pianoman9701]

If you want to move and sell your present home, don't list it if you want to save money over a bridge loan by getting HELOC to cover your down payment. HELOCs (Home Equity Line of Credit) can act like a bridge loan, but far cheaper in both rate and closing costs. If you own your home outright, some banks will allow a HELOC up to the full value of your property. If you still owe money, they will usually lend you up to 80% of your equity (Equity is the difference between what you owe and what the property is worth). This way, you can borrow what you need for the down payment on your new home and pay off the HELOC when you sell your old one. However, you can't get a HELOC if the house has already been listed. The difference in rate can often be 4-6% higher for a bridge loan than a HELOC.

I don't do HELOCs or bridge loans. This post is for your benefit. If you're in this position, talk to the bank with which you do your banking. Banner Bank has a good program and if you need a contact, I have one for you. I don't receive a referral fee for this.

[Igor]

If you are going the HELOC route, do your homework.

Wells Fargo and Chase don't offer HELOCs.  We started with B of A.  Gave up quickly on them when it was going to be 7-11 weeks for approval.

Now in the process with BECU, and we are not happy.  They promised 3-4 weeks processing time.  Will be 4 weeks at the end of this week, and they are still 2-3-4 weeks out.......who knows?  I would call it one big cluster-muck at this time.  And our situation is a very simple one.

Ask LOTS of questions before you start the process.

[brocka]

If you are going the HELOC route, do your homework.

Wells Fargo and Chase don't offer HELOCs.  We started with B of A.  Gave up quickly on them when it was going to be 7-11 weeks for approval.

Now in the process with BECU, and we are not happy.  They promised 3-4 weeks processing time.  Will be 4 weeks at the end of this week, and they are still 2-3-4 weeks out.......who knows?  I would call it one big cluster-muck at this time.  And our situation is a very simple one.

Ask LOTS of questions before you start the process.

I dont think you will find a bank that can do a HELOC in the time frame you want right now.

[Southpole]

Why does it take so long for a Heloc loan to go through? Also, I’m assuming there’s no early payoff penalty for Heloc?

[jstone]

Great Information

[Igor]

Why does it take so long for a Heloc loan to go through? Also, I’m assuming there’s no early payoff penalty for Heloc?

Yes there is, with B of A.  That is one reason we backed off and did not go with them.   If the line of credit is not kept open for at least three years, I believe the penalty was around $500.

And, with B of A, they wanted us to borrow $100,000 up front, as soon as it was approved.   We wanted to borrow the money as we needed it to do home repairs.  But, they wanted to to borrow the money up front, and incur a monthly payment of around $345.

Do your homework before you get into a HELOC.

[pianoman9701]

If you are going the HELOC route, do your homework.

Wells Fargo and Chase don't offer HELOCs.  We started with B of A.  Gave up quickly on them when it was going to be 7-11 weeks for approval.

Now in the process with BECU, and we are not happy.  They promised 3-4 weeks processing time.  Will be 4 weeks at the end of this week, and they are still 2-3-4 weeks out.......who knows?  I would call it one big cluster-muck at this time.  And our situation is a very simple one.

Ask LOTS of questions before you start the process.

I dont think you will find a bank that can do a HELOC in the time frame you want right now.

HELOCs shouldn't take too long once the borrower supplies the requested paperwork and VOE information. Not sure why you've had that trouble. My friends have had very good results but with more local lending institutions. 

[pianoman9701]

Why does it take so long for a Heloc loan to go through? Also, I’m assuming there’s no early payoff penalty for Heloc?

Some with and some without. Ask your banker. Obviously, you don't want one. I know with mortgages that have a prepayment penalty, you pay a higher rate. I don't know how they handle that with  HELOC - maybe in the processing fees.

[Igor]

HELOCs shouldn't take too long once the borrower supplies the requested paperwork and VOE information. Not sure why you've had that trouble. My friends have had very good results but with more local lending institutions. 

We hadn't even gotten around to discussing paperwork and VOE information.  That was basically part of the initial discussion before we even started with paperwork......7-11 weeks.  We were not impressed with B of A.

[pianoman9701]

HELOCs shouldn't take too long once the borrower supplies the requested paperwork and VOE information. Not sure why you've had that trouble. My friends have had very good results but with more local lending institutions. 

We hadn't even gotten around to discussing paperwork and VOE information.  That was basically part of the initial discussion before we even started with paperwork......7-11 weeks.  We were not impressed with B of A.

That really sucks. I'm sorry to hear. Apparently, some people seem to think they really suck.  When I do mortgages, for example, it's usually by working evenings and weekends, and I give the borrowers a list of the required paperwork, first thing before I even register the loan. I'm unsure that HELOC is anywhere near as complicated as a mortgage. So far, with only two exceptions, all of my dozens of loans have closed in less than a calendar month, and about half of those, less than three weeks.

[Igor]

HELOCs shouldn't take too long once the borrower supplies the requested paperwork and VOE information. Not sure why you've had that trouble. My friends have had very good results but with more local lending institutions. 

We hadn't even gotten around to discussing paperwork and VOE information.  That was basically part of the initial discussion before we even started with paperwork......7-11 weeks.  We were not impressed with B of A.

That really sucks. I'm sorry to hear. Apparently, some people seem to think they really suck.  When I do mortgages, for example, it's usually by working evenings and weekends, and I give the borrowers a list of the required paperwork, first thing before I even register the loan. I'm unsure that HELOC is anywhere near as complicated as a mortgage. So far, with only two exceptions, all of my dozens of loans have closed in less than a calendar month, and about half of those, less than three weeks.

Here is a stupid question......do bridge loans even exist any longer ?  B of A and Wells Fargo say there is no such thing as a bridge loan today.

[Southpole]

I bank with Banner so I think I’ll drop in and see what they have to say.

[pianoman9701]

HELOCs shouldn't take too long once the borrower supplies the requested paperwork and VOE information. Not sure why you've had that trouble. My friends have had very good results but with more local lending institutions. 

We hadn't even gotten around to discussing paperwork and VOE information.  That was basically part of the initial discussion before we even started with paperwork......7-11 weeks.  We were not impressed with B of A.

That really sucks. I'm sorry to hear. Apparently, some people seem to think they really suck.  When I do mortgages, for example, it's usually by working evenings and weekends, and I give the borrowers a list of the required paperwork, first thing before I even register the loan. I'm unsure that HELOC is anywhere near as complicated as a mortgage. So far, with only two exceptions, all of my dozens of loans have closed in less than a calendar month, and about half of those, less than three weeks.

Here is a stupid question......do bridge loans even exist any longer ?  B of A and Wells Fargo say there is no such thing as a bridge loan today.

Yes they do. Sometimes, if someone is unscrupulous and wants to keep your business in their pocket, they won't tell you the truth. I'm not saying that's the case here. It's probably a coincidence that neither knows about actual bridge loans.  Try Googling who does bridge loans.

[Benny]

If you want to move and sell your present home, don't list it. HELOCs (Home Equity Line of Credit) can act like a bridge loan, but far cheaper in both rate and closing costs. If you own your home outright, some banks will allow a HELOC up to the full value of your property. If you still owe money, they will usually lend you up to 80% of your equity (Equity is the difference between what you owe and what the property is worth). This way, you can borrow what you need for the down payment on your new home and pay off the HELOC when you sell your old one. However, you can't get a HELOC if the house has already been listed. The difference in rate can often be 4-6% higher for a bridge loan than a HELOC.

I don't do HELOCs or bridge loans. This post is for your benefit. If you're in this position, talk to the bank with which you do your banking. Banner Bank has a good program and if you need a contact, I have one for you. I don't receive a referral fee for this.

I don't post much (really ever) and have no dog in this fight but I feel like I just have to say, man this is really scary advice IMO. Telling a homeowner that may (or may not) be financially literate to go borrow money on their existing home to bridge the gap to borrow more money on their next home can be absolutely devastating to a family. A lot can happen in the 45-90 days between closings that could take years to correct....all while you are stuck owning two homes. I would offer, use massive amounts of wisdom if you go this route because that's a gamble most can't afford to make.

Carry on.....

[pianoman9701]

If you want to move and sell your present home, don't list it. HELOCs (Home Equity Line of Credit) can act like a bridge loan, but far cheaper in both rate and closing costs. If you own your home outright, some banks will allow a HELOC up to the full value of your property. If you still owe money, they will usually lend you up to 80% of your equity (Equity is the difference between what you owe and what the property is worth). This way, you can borrow what you need for the down payment on your new home and pay off the HELOC when you sell your old one. However, you can't get a HELOC if the house has already been listed. The difference in rate can often be 4-6% higher for a bridge loan than a HELOC.

I don't do HELOCs or bridge loans. This post is for your benefit. If you're in this position, talk to the bank with which you do your banking. Banner Bank has a good program and if you need a contact, I have one for you. I don't receive a referral fee for this.

I don't post much (really ever) and have no dog in this fight but I feel like I just have to say, man this is really scary advice IMO. Telling a homeowner that may (or may not) be financially literate to go borrow money on their existing home to bridge the gap to borrow more money on their next home can be absolutely devastating to a family. A lot can happen in the 45-90 days between closings that could take years to correct....all while you are stuck owning two homes. I would offer, use massive amounts of wisdom if you go this route because that's a gamble most can't afford to make.

Carry on.....

There's nothing scary about giving people options when they need to buy and to sell. I was showing the difference between a HELOC and a bridge loan; two very common loans often used for this purpose. They either qualify for the payments or they don't. What would you suggest for someone who needs to move, buy a house, and hasn't sold theirs first? This is done quite frequently and in a seller's market, the risk is lower. For example: a government employee who gets stationed elsewhere and has to move a large family. If someone is so financially illiterate, as you suggest, chances are they don't qualify for a mortgage in the first place.

I've got absolutely zero to gain here. I don't do these types of loans. But there are plenty of people on this forum who will be in this position when they leave this pit of a state to go elsewhere.

[Benny]

Incorrect, options are not what you are implying. You stated "If you want to move and sell your present home, don't list it".

That's not giving people options. That's pushing a singular point of view out there. And to say that financially illiterate people likely can't get a mortgage is like saying 2003-2008 didn't happen, because that was a major factor in the recession and it is still happening today.

....and my biggest piece of advice for folks selling and also in need of buying is requiring a rent back clause when they sell their existing home. As you say, its a sellers market and very few buyers will bat an eye at a 30 or 60 day rent back.

Again, not wanting to start an argument. I get you are wanting to educated and I applaud that. I have just seen a lot of destruction when someone gets over-leveraged and something bad happens at the worst possible time.   

[pianoman9701]

Incorrect, options are not what you are implying. You stated "If you want to move and sell your present home, don't list it".

That's not giving people options. That's pushing a singular point of view out there. And to say that financially illiterate people likely can't get a mortgage is like saying 2003-2008 didn't happen, because that was a major factor in the recession and it is still happening today.

....and my biggest piece of advice for folks selling and also in need of buying is requiring a rent back clause when they sell their existing home. As you say, its a sellers market and very few buyers will bat an eye at a 30 or 60 day rent back.

Again, not wanting to start an argument. I get you are wanting to educated and I applaud that. I have just seen a lot of destruction when someone gets over-leveraged and something bad happens at the worst possible time.   

No, I didn't say that. I said you can't get a HELOC if your house is listed for sale. If you want to get a bridge loan, which costs a lot more and still has you leveraged, you can list your home. Listings in most of WA right now are selling in about 7 days. I suggest you buy a sponsorship and post all the opinions you want in the sponsor classifieds. Thanks for playing. 

[Benny]

Incorrect, options are not what you are implying. You stated "If you want to move and sell your present home, don't list it".

That's not giving people options. That's pushing a singular point of view out there. And to say that financially illiterate people likely can't get a mortgage is like saying 2003-2008 didn't happen, because that was a major factor in the recession and it is still happening today.

....and my biggest piece of advice for folks selling and also in need of buying is requiring a rent back clause when they sell their existing home. As you say, its a sellers market and very few buyers will bat an eye at a 30 or 60 day rent back.

Again, not wanting to start an argument. I get you are wanting to educated and I applaud that. I have just seen a lot of destruction when someone gets over-leveraged and something bad happens at the worst possible time.   

No, I didn't say that. I said you can't get a HELOC if your house is listed for sale. If you want to get a bridge loan, which costs a lot more and still has you leveraged, you can list your home. Listings in most of WA right now are selling in about 7 days. I suggest you buy a sponsorship and post all the opinions you want in the sponsor classifieds. Thanks for playing. 

You did say exactly that, in your first sentence.

I'm done now...I promise 

[pianoman9701]

Incorrect, options are not what you are implying. You stated "If you want to move and sell your present home, don't list it".

That's not giving people options. That's pushing a singular point of view out there. And to say that financially illiterate people likely can't get a mortgage is like saying 2003-2008 didn't happen, because that was a major factor in the recession and it is still happening today.

....and my biggest piece of advice for folks selling and also in need of buying is requiring a rent back clause when they sell their existing home. As you say, its a sellers market and very few buyers will bat an eye at a 30 or 60 day rent back.

Again, not wanting to start an argument. I get you are wanting to educated and I applaud that. I have just seen a lot of destruction when someone gets over-leveraged and something bad happens at the worst possible time.   

No, I didn't say that. I said you can't get a HELOC if your house is listed for sale. If you want to get a bridge loan, which costs a lot more and still has you leveraged, you can list your home. Listings in most of WA right now are selling in about 7 days. I suggest you buy a sponsorship and post all the opinions you want in the sponsor classifieds. Thanks for playing. 

You did say exactly that, in your first sentence.

I'm done now...I promise 

You're absolutely correct. I stand corrected. I'll edit that. Thank you.

[pianoman9701]

I changed it for accuracy. Thanks again.

[Benny]

 

[Southpole]

I appreciate the advice on loan options. I’m asset rich and cash poor which a Heloc would be a good option for future home purchasing.