Posted on: 04th Sep, 2012 02:06 pm
Hi,
I've applied for a Home Equity Line of Credit already, my Home loan amount is 185K, and the appraisal came back 225K for the value of my condo in Canton, MA..
In order to qualify for HELOC. I need to pay an additional 5K to make up the 80% LTV ration.. My current rate is 5.125% and the HELOC will be 3.75%.. I am planning to put my condo on the market next yest and hopefully sell it in a year..
Should I go for it? or this is too risky? I know the rate fluctuates and who know what will happen after the election.. I also did some research online and someone said that with HELOC,a bank could foreclose your home even if you are current with your mortgage!? Is this true?
Should I find a 5/1 instead? but with the closing cost may not make any sense~ PLEASE HELP~~!
PS. If I go for the HELOC, can i keep the line open after selling the condo to avoid the 36 mo prepayment penalty?
Thank you so much!!
Gina
I've applied for a Home Equity Line of Credit already, my Home loan amount is 185K, and the appraisal came back 225K for the value of my condo in Canton, MA..
In order to qualify for HELOC. I need to pay an additional 5K to make up the 80% LTV ration.. My current rate is 5.125% and the HELOC will be 3.75%.. I am planning to put my condo on the market next yest and hopefully sell it in a year..
Should I go for it? or this is too risky? I know the rate fluctuates and who know what will happen after the election.. I also did some research online and someone said that with HELOC,a bank could foreclose your home even if you are current with your mortgage!? Is this true?
Should I find a 5/1 instead? but with the closing cost may not make any sense~ PLEASE HELP~~!
PS. If I go for the HELOC, can i keep the line open after selling the condo to avoid the 36 mo prepayment penalty?
Thank you so much!!
Gina
Hi, those are all actually personal preferences and each borrower would have a different take on it... if you did do a 1st mortgage on lets say a 5/1 arm, rates would be in the low 3's possibly the 2's...What is better for you, a flexible rate and payment, or a fixed set amount? Your heloc can be subordinated, with the approval of the note holder.
also, to answer your foreclosure question. There has to be a reason for the lender to issue a NOD and/or a NOS...Based upon you defaulting in some way...Lender can also call the entire loan due for suspect of fraud or misrepresentation or if you get behind on your payments. A 2nd or 3rd position mortgage can purchase the other liens in higher priority and foreclose on the home, but you have to have defaulted or breeched the contract in some way...