02-06-2013 03:27 PM
Yeah, the famous HELOC was the downfall of plenty of people. Not trying to get one to "afford a new car" or anything like that. We had one as an emergency fund when we had our last house. We sold that place and bought a new place. We took all of our equity from our previous house and put it in as a down payment on our current place (bought in 2011). I was wondering about establishing a HELOC as a security cushion based on our pool of equity. We just did a 30-yr fixed refi (no money out) late last year and that went through without a hitch. Anybody take one out recently? I assume the underwriting is as tough as a refi but any other suggestions or cautions?
02-06-2013 07:27 PM
Yeah, I don't think its is especially harder nowadays for a run of the mill heloc than it was before. I think the main difference is no longer are they that willing to give HELOCS up to 100% CLTV. I've seen a few places fo 90%, but if you are only looking to go up to 80% it should be a breeze.
02-06-2013 07:29 PM
The purchase money heloc is dead in CA, after the banks figured out there was no recourse and no way to foreclose and collect really.... thanks to CA consumer friendly laws. Good riddance to that anyway. But the standard HELOC is a line of credit just like a credit card so I can't see why they wouldn't continue with it.
02-06-2013 08:01 PM
Didn't we hear HELOC's were the thingy that got so many in trouble when the bubble popped? Well, for some it came handy, they just walked away from the home to start anew. None the less to say, we have examples of people buying another home while short selling the principal and acting as if anything happened.