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Applying for Heloc during Covid - waste of time?


paganredhead
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Hi:

 

Long time member who has not been here in very long time. My partner and I are considering applying for a Heloc but are unsure if it worth the time and hard inquiry. Long time member of my credit union where I am in good standing with other credit products. Scores are decent for both me and my partner: at least 700 depending on the bureau and what score model is being used. Util is moderate on cards. We are both employed with good salaries. Partner has been at his job for 10 years, I just changed jobs but was at my last job for 22 years and moved for a higher salary. I am reading that some banks have paused these apps. MY CU has not so far but that could change. ANy wisdom or opinions around this are greatly appreciated!

 

Thanks!

 

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You should be able to discuss this with your CU officers and gauge the current temperature...that would be the best way to avoid a potential hard pull if that was who you were seeking to get the HELOC with. 

 

You describe moderate utilization but do not indicate how many cards and, of those, how many have a balance.  Score components related to utilization look not only at the overall percentage of credit in use but ALSO how many cards have a balance contrasted with the overall number of cards.  This is why all zero except one is recommended when seeking to maximize scores...

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I am in process with DCU right now.  The appraiser was here this morning.

 

There are fewer places doing HELOCs now, and some who still are have tightened up guidelines (PNC advertises 90% combined LTV on their web site, but if you call they'll tell you they'll only go to 80%).

 

Many of the offers I got were priced as if they don't want people taking them.  DCU was an exception at Prime minus 0.25% (which would be a 3.25% rate today), but many I found were Prime plus 1% or more.

 

You may have to go outside of your current CU to find something appealing.  Don't get a HELOC from them just because they still offer them and you've had a checking account there for 12 years.  Make sure the terms are competitive/appealing.

 

Edited by cv91915
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15 hours ago, cv91915 said:

I am in process with DCU right now.  The appraiser was here this morning.

 

There are fewer places doing HELOCs now, and some who still are have tightened up guidelines (PNC advertises 90% combined LTV on their web site, but if you call they'll tell you they'll only go to 80%).

 

Many of the offers I got were priced as if they don't want people taking them.  DCU was an exception at Prime minus 0.25% (which would be a 3.25% rate today), but many I found were Prime plus 1% or more.

 

You may have to go outside of your current CU to find something appealing.  Don't get a HELOC from them just because they still offer them and you've had a checking account there for 12 years.  Make sure the terms are competitive/appealing.

 

Fixing an error in my post above...

 

Prime is currently 3.25%, which makes the current (variable) rate on the DCU HELOC 3.00%.  Sorry about that.

 

Here is a link to the current Prime and other interest rates, since nothing stays static forever:  https://www.wsj.com/market-data/bonds/moneyrates

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  • 1 year later...
On 5/26/2020 at 5:25 PM, cv91915 said:

I am in process with DCU right now.  The appraiser was here this morning.

 

There are fewer places doing HELOCs now, and some who still are have tightened up guidelines (PNC advertises 90% combined LTV on their web site, but if you call they'll tell you they'll only go to 80%).

 

Many of the offers I got were priced as if they don't want people taking them.  DCU was an exception at Prime minus 0.25% (which would be a 3.25% rate today), but many I found were Prime plus 1% or more.

 

You may have to go outside of your current CU to find something appealing.  Don't get a HELOC from them just because they still offer them and you've had a checking account there for 12 years.  Make sure the terms are competitive/appealing.

 

Did you finish this process? How did it go? Who pays for the appraisal?

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18 hours ago, nolanryan said:

Did you finish this process? How did it go? Who pays for the appraisal?

 

Yes, it took forever but we closed.  We didn't pay for anything out of pocket (either upfront or ongoing).  

 

Many/most HELOC options don't cost anything to originate, but many also have a clause that requires you to repay the closing costs if you close the line within X years, so make sure you ask if this is an issue/concern.

 

We also have a HELOC with Chase, also originated with $0 OOP, but they charge a $50 AF.  

 

Chase had the best rate at the time, but that was the wrong reason for us to select their particular HELOC.  If I had to do it over again I wouldn't select a HELOC with an AF, as I use the line so rarely the rate doesn't matter much.  

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