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Old 01-10-2008, 12:52 PM   #41
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OWNER OCCUPIED HOME -
80% OR LESS LOAN TO VALUE (LTV) Borrow $10,000 - $400,000
OK, so do you have to get an appraisal? That means I can borrow 80% of my houses value? Regardless fo my equity? Is this all done over the internet?
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Old 01-10-2008, 01:03 PM   #42
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They look at the on-line information in the County you live in. At least that is what they did for my HELOC.
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Old 01-10-2008, 01:45 PM   #43
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That means I can borrow 80% of my houses value? Regardless fo my equity?
Is that correct? I thought you could only borrow up to the amount of equity in your house...
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Old 01-10-2008, 08:51 PM   #44
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Is that correct? I thought you could only borrow up to the amount of equity in your house...
The 80% LTV numbers that PenFed cites includes your first mortgage balance (if any) as well. You can borrow more than 80% LTV from PenFed, and you can borrow it for longer terms, but in both cases you won't get the 4.99% rate.

I considered this deal but have decided to pass it up. In my case I have 29 years left on a 30 year fixed at 5.75% that started out at 80% LTV. If I borrow enough to make it worth it, my cash flow becomes constrained, and most of the benefit I receive is simply from accelerating the paydown on my mortgage balance(s), not from the lower interest rate. I did a spreadsheet that indicated that for me, refinancing part of my mortgage into this HEL was equivalent to about a 4.7% tax free yield, which wasn't enough to compensate me for the perceived risk associated with the higher cash flow requirements.

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Old 04-13-2008, 01:00 PM   #45
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I went back and looked at this thread which was started last Dec. At the time PenFed was doing the 4.99% Home Equity Loan. I considered doing it but was waiting til a couple of things lined up before I pulled the trigger. I had floated about $75K on credit cards at 0% making about $4K in interest but I figured my FICO was low so I waited.

When I was ready to pull the trigger the rate had went back up to 5.25%. Not a big difference but I decided to wait. This past week I pulled the trigger and took about 45% of what I owe on the first mortgage. It took about 10 min and within 2 hrs I got an email asking me where I wanted the money sent and that the closing documents were on the way. Painless process so far.

So here is the plan. I am eligible to retire in about 25 months from the military. I intend to pay all this on the first mortgage and will be able to have the remaining first mortgage balance paid off in 25 months. I will now have a much smaller payment going forward once I retire. So for me this is a way to reduce cash flow needs and give me a little more flexibility at a smoking fixed rate.

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Old 04-13-2008, 05:51 PM   #46
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Tomcat: Be careful with the PENFED Loan. The 0 closing costs are 0 as long as you do not close (payoff the loan) in less than 24 months. If you do they will charge you for the closing costs. No big deal if this is the case just keep it open for 24 months. That clause may not apply to yours, but be sure to read the documentation closely.
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Old 04-13-2008, 06:43 PM   #47
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Thanks. I noticed that and will keep an eye on it.

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Old 04-14-2008, 12:10 PM   #48
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I did this deal, and I was surprised the "closing costs" were only $124. So I may have to repay that if I pay off the loan early. I guess when the bank is paying closing costs, they'll find a way to make them as low as possible.
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