Some have heard of a HELOC before but not from a professional that knows them well like myself. Here are some misconceptions that I hear. See if you have these same misconceptions as well.
We only have 10% equity in our home, how are we going to use that to pay off our existing mortgage?
I only had 10% equity in my home. I called the bank and said, “Look, what I’m going to do is I’m going to refinance my existing mortgage into a home equity line of credit.”
You’re not having 2 loans at the same time, you’re just substituting one for the other. Sometimes you don’t need any equity at all. In fact, we found dozens of banks that do 100% financing. Primarily we like folks to have a little bit of equity. We’re not using that equity so the misconception comes in the name of the type of product that we’re talking about because it is called a home equity line of credit. In fact, that’s where a lot of bankers get confused too.
They’re also thinking no differently than you because nobody’s coached them or told them how this works. They’re thinking that you can only use it in a second lien position and use the equity that’s available above and beyond your mortgage.
Nothing could be further from the truth. You can actually refinance your mortgage into a home equity line of credit and that be your only loan.
Home Equity Loan VS Mortgage. There is a big difference and you should know about each of them.
So when you buy a house, you get a mortgage. That’s what 99.3 percent of all Americans do. Now that’s a mortgage. Let’s talk about a Home Equity Loan. A Home Equity Loan is typically a second lien position. Basically, a second mortgage behind your first mortgage. Really, it’s just more debt, with the same problem of having the wrong product to use to pay off your home.
In fact, in Australia, 80 plus percent of citizens use a Home Equity Line of Credit instead of a mortgage. They call it a “Offset Account”. They also happen to be the highest population of second home ownership, probably because they can pay for two homes in half the time that it takes Americans to pay for one.
Again, we recommend using a Home Equity Line of Credit, treating like your savings and checking account, and you’ll accelerate the payoff of your home much faster, and actually, much easier, than paying off a mortgage.
Introductory Rate: 2.74% APR. (O.A.C)
Applies to balances on the first six monthly statement cycles after the account open date.
Later Variable Rate as Low as: 4.25% APR. (O.A.C)
Ask about Fixed Rate Payment Option.
You can borrow against you line of credit.
You’re approved for a total line of credit, buy you will only pay interest on the amount you have drawn.
Your monthly FlexLine payment can be deducted right from your Comerica checking or savings account.
Get up to 10 years to draw (draw period) on your credit and up to 20 years to repay.
Please double check current rates and guidelines with your banker and or attorney, rates and programs change frequently. We are not offering any legal or investment advice. Please do your own due diligence.
1 The Introductory Annual Percentage Rate (APR) of 2.74% is for home equity line of credit accounts only and applies to balances on the first six monthly statement cycles after the account open date, which changes to a variable APR as low as 4.25% at the end of the introductory period for line amounts $50,000 or greater. This rate includes a 0.25% discount for maintaining an automatic payment from a Comerica Bank deposit account. Non-discounted APRs as of 3/16/2017 range from 4.50% to 7.75% APR. Your margin, rate and payment may differ based upon loan amount, collateral value, credit history and additional banking relationships. To receive this rate, the application must be submitted between May 5 and June 16, 2017, and the loan must close by September 15, 2017. This special offer is for a limited time only and cannot be combined with any other offers or special promotions. After the introductory rate expires, your rate will never be lower than 3.50% or higher than 18%. APR is a variable rate that will change based on the prime rate as published in the Midwest edition of The Wall Street Journal (currently 4.00% as of March 16, 2017) plus a margin. A security interest will be taken in your home. Comerica reserves the right to modify or end this offer at any time. Subject to credit approval.
2 A cash advance fee of $2 to $15 applies. $350 early termination fee, if account is closed within the first two years for Michigan customers. $50 annual fee (waived the first year) for Michigan customers. No title fees and no cost for the initial property valuation conducted by Comerica for credit line amounts less than or equal to $500,000. Additional property valuations, when requested by you, are at the sole discretion of the bank at your cost. Property insurance is required and flood insurance may be required.
4 A value up to $450 [WU1] when you maintain your account for ten years. To receive this offer, application must be submitted between May 5 and June 16, 2017, and the loan must close by September 15, 2017.
NOTE: Here is a bonus video.
We have researched 400+ banks and credit unions when researching home equity lines of credit guidelines for our clients and the all in one loan has the best benefits that we have come across.
Another great benefit I found is Reliant bank specializes in processing this one specific loan so they know it better than most. They process every single day.
If you meet the guideline requirements, I highly recommend having a conversation me to see if this makes sense for you.
Lastly, If you do not meet these guidelines, do not get discouraged. We work with over 200+ banks and credit unions so I know there is a HELOC for you.
– 700 credit score
– 10% in liquid assets
– 80% ltv
– no bankruptcy or foreclosure last 7 years