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April 27, 2009
HELOC rates
Was just quoted a rate of prime plus 1.25% for a HELOC on a three family - great credit, plenty of equity. Any thoughts on how competitive that rate is? Thanks.
Comments
Whether or not its a competitive rate is not the question. The question is are you able to afford the payments for the amount of money you borrow if, at some point in the future, the rate is 2% or 3% points higher as rates move up in a year or so.
Posted by: daveinbedstuy at April 28, 2009 7:42 AM
Thanks Dave. Yes, I am able to afford fluctuations, which is why at present I am focused on the rate. This is especially because previously (a few years ago) HELOC's were prime *minus* a quarter! I can understand why rates would have increased, especially on a HELOC, but want to make sure I am not being ripped off. Thanks for your views.
Posted by: Woofer Plantation at April 28, 2009 8:03 AM
Check TD Bank. I hear that they are still going to 90% and are at prime for life.
Banks lost a lot of money on HELOCs over the past few years. They had to increase their margins to cover for those loses. HELOCs on multi unit properties are harder to come by these days.
Check the big national banks and a few regional banks.
Posted by: Adam Dahill at April 28, 2009 9:05 AM
From what I've seen that's definitely competitive. Some banks are 2 - 3% over prime, and many banks just won't touch helocs at all now. Also, note requirements on combined ltv of the first and second mortgage combined - typically around 60% now if you want a new heloc.
Posted by: raphael9 at April 28, 2009 6:42 PM
just closed a citibank heloc - 4.24% (prime + 0.99). It's for a co-op. Must keep line open for 3 years and agree to automatic payment from account.
Posted by: couldashouldawoulda at April 28, 2009 9:07 PM
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