HELOC question

Financing, Hard Money Lenders, Private Money
1

Hi folks, I have a HELOC question or scenario — " Now " : I own and control my $ 150K + property free and clear . Okay, " After " HELOC is in place the bank diminishes my control by what factor? If , for example , in 2 yrs I need or want to sell my home, for whatever reason, what role does the HELOC have in the transaction of my property? How , then , do you remove or negate a HELOC prior to the period it was designed or set up for? Is this a problem? Thanks for your attention, Mike

2

microbe,

To answer your first question the bank only controls the percentage of loan to value you have drawn on your HELOC. For example if you were to draw 15K out of your HELOC, then the bank would have a 10% share of your property value. If you draw out 150K, then the bank has a 100% loan to value of your property. Second question… your HELOC should not have a pre-pay on it. So if you choose to sell the property at any point the lien on the property for the HELOC would have to be paid at closing, but you would not have to pay a penalty.Third question…If you choose to close out the HELOC earlier than planned all you have to do is pay it off, contact the bank and let them know you want to close the account. You wil go to th bank, sign some documents and be done with it. Hope this helps.

3

Thanks Chris. Can you tell me the difference between an equity line of credit and a home equity line of credit. Thanks ahead of time, Mike.

4

I think they’re synonymous in most residential situations. You can get a commercial line of credit. An equity line is against an asset. Most common ones are against a home.

5

Thanks Dee, I had been confused for a while between a HELOC and a ELOAN. One thing that I still have a problem with is, if I use my HELOC and keep paying the balance off when I complete a deal, so that I don’t have a balance to pay interest on, and then somewhere in the next 2 or 3 years I want to sell my home, does a HELOC cloud my title? Thanks , Mike. — PS — Can you tell me more about SUB TO"S in Texas or is there a place on this forum where they are discussed, as I am in Conroe?