HELOC Question

I was speaking with CHASE in Dec.08 about HELOCs, and was told that if you have Home Equity Line of Credit, you better pull money out into checking account, because HELOC can get frozen at any minute.

barskaya
(broker)

Not impossible to get HELOCs but they are not handing them out like candy like they used to.

Check to see if there's a prepayment fee if you close it down early (for example, to sell the apartment) -- that's usually the big hidden one.

And Elena is right, banks are cancelling HELOCs without warning, so if you think you're going to want any of the money, pull it out and bank it now.

You will then pay interest on that loan depending on the terms of your contract -- it's probably a floating rate.

ali r.
{downtown broker}

Banks are not pulling credit lines from people who don't need the money, as far as I can tell. Years ago it cost you nothing to set up a HELOC and very little in fees to close the line. Today, I wouldn't be surprised if a bank is trying to pass along the costs of opening a line of credit, including set-up, recording a lien, taxes etc. Given that it is hard to borrow at 2+% anywhere else, the bank may be able to charge those fees today.

I have a large HELOC, untapped. Cost me nothing.

when did you set it up is the relevant issue for BigG so, nyc10023, when did you?

i set it up over the last monthor so. What I am expecting unfortunately is a few grand in misc fees + !% of the whole deal (20k) in mortgage recording fee, or something like that. The bank (US Bank) is getting back to me with the fees I can expect.

I recently set up a $200K HELOC for a second home with no fees. It's interest only at prime minus .75% for 15 years with a 15 year draw. Documentation required is bizarre selection of docs and more nit-picky than in past, but despite longer approval time than in past, it came through. Have it for 4 months. Tapped only 1/4 of it so far. And so far so good.

Banks are INDEED pulling lines. If you say they are not, you don't work for one. They are trying to limit the damage. They are going off of comps in the 'hood. Doesn't matter what your score is.