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When looking at bankrate I get quoted between 6 - 7% for Helocs / homeloans, for 30k and all under 80 ltv. This is way above the prime rate and I find it inappropriately expensive considering banks can lend money pretty much for free. Any ideas why it is so expensive?
What home loans are that high? I'm not sure how you find pricing of another business inappropriate but surely if it can be done better it's got to be out there right?
I'm also seeing rates lower than that but your might be directed by such a small amount of a line
I know of no bank that lends money 'pretty much for free'!
Sorry I meant borrow for free. I find the difference between their borrowing and then their lending rates excessive. You can get unsecured personal loans for <10%.
Sorry I meant borrow for free. I find the difference between their borrowing and then their lending rates excessive. You can get unsecured personal loans for <10%.
Well the heloc is second inline in the event of default I believe also not protected by pmi
When looking at bankrate I get quoted between 6 - 7% for Helocs / homeloans, for 30k and all under 80 ltv. This is way above the prime rate and I find it inappropriately expensive considering banks can lend money pretty much for free. Any ideas why it is so expensive?
Maybe you have bad credit? What terms? My favorite 5/5 HELOC with my bank are much lower than that.
When looking at bankrate I get quoted between 6 - 7% for Helocs / homeloans, for 30k and all under 80 ltv. This is way above the prime rate and I find it inappropriately expensive considering banks can lend money pretty much for free. Any ideas why it is so expensive?
You may find it inappropriately expensive but you're looking at it from the view of a borrower not a lender.
If you were a lender someone came to you and wanted a loan on a property they already had a loan on, would you lend to them at a low rate or would you say, wait a minute if this guy defaults I may be eating a **** sandwich since he already has a first loan. You would want to protect your money as well as you could.
Truthfully because it's a HELOC and a higher risk loan. It's a secondary loan. If you default the primary loan finance entity is the first that has first claim. Seconds are always at a higher rate. That's why a HELOC or 2nd are a bad idea IMO. I have a great credit score and I declined a HELOC because I didn't want to pay the rate they offered. Which wasn't bad. I just didn't want the debt. I'm glad I didn't get it.
You may find it inappropriately expensive but you're looking at it from the view of a borrower not a lender.
If you were a lender someone came to you and wanted a loan on a property they already had a loan on, would you lend to them at a low rate or would you say, wait a minute if this guy defaults I may be eating a **** sandwich since he already has a first loan. You would want to protect your money as well as you could.
Truthfully because it's a HELOC and a higher risk loan. It's a secondary loan. If you default the primary loan finance entity is the first that has first claim. Seconds are always at a higher rate. That's why a HELOC or 2nd are a bad idea IMO. I have a great credit score and I declined a HELOC because I didn't want to pay the rate they offered. Which wasn't bad. I just didn't want the debt. I'm glad I didn't get it.
This
You could be snorting the money for all the bank knows and all they have to show for it is 2nd place in a line to collect should you blow up.
Tons of irrational idiocy during the last housing crack up was exposed where people were simply using Helocs as ATMs to withdraw the phantom equity they had in their home fund their continued living above income spending.
Moderator cut: quoted text has been removed
Last edited by yellowbelle; 07-09-2015 at 08:33 AM..
Reason: orphaned - quoted text removed. Please flag these type of posts instead of feeding them. :)
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