HELOCs - PenFed vs. US Bank?

[Carpediem]

I am in the process of getting our ducks in a row (pre-retirement) and one of those items is getting a HELOC in place before I hang it up. Based on my research, I am favoring either PenFed or US Bank since both have similar terms. However, PenFed does charge the applicant for an appraisal if one is needed. PenFed's variable rate is slightly lower. (Btw, our house still has a small mortgage on it through US Bank.)

Does anyone have any experience or a recommendation for one versus the other? Or is there another lender than you'd use before one of these two?

 

[braumeister]

When I applied for a PenFed HELOC they just had someone drive by the house and take a picture of it, so you might not need a formal appraisal.

 

[ExFlyBoy5]

We got a HELOC from PenFed in 2013 in anticipation of retirement. We have yet to use it but the application/underwriting process was very easy. We didn't have a mortgage at the time and the line we requested was less than 30% of the value, so can't speak to the appraisal process.

 

[Sunset]

How much is the fee ?

Do either charge an ongoing (yearly) fee to keep the HELOC if you don't use it ?

What is the rate difference, if it's small has one always been cheaper or is it just now when you are looking that you see it in this direction and maybe next year the other will be cheaper ?

If you use the HELOC, can you lock in the rate for 5 years, so in effect it becomes fixed like a mortgage instead of floating higher and higher each year ?
And if you can lock it in, what rate/ rules do they use for the locked in rate ?

 

[Carpediem]

How much is the fee? No fees, other than the possible appraisal. (From the PenFed website: An appraisal is required for all applications with a CLTV over 80%. For applications with a CLTV of 80% or less, PenFed will attempt to establish value via an independent method. If that method is unsuccessful, an appraisal will be required regardless of CLTV.)

Do either charge an ongoing (yearly) fee to keep the HELOC if you don't use it? No, it doesn't appear either do.

What is the rate difference...? Variable 4.25 (PenFed) vs. variable 4.65 (US Bank)

If you use the HELOC, can you lock in the rate for 5 years, so in effect it becomes fixed like a mortgage instead of floating higher and higher each year ? And if you can lock it in, what rate/ rules do they use for the locked in rate ?

From the US Bank site: "Choose a variable rate HELOC with a fixed-rate option, or interest-only payments. The fixed-rate option lets you lock in all or any part of your variable balance with a fixed rate at any time."

 

[Montecfo]

I would tend to favor Heloc from a different financial institution than one holding my mortgage. Also, one question would be, did either pull out of HELOC market during financial crisis?

Appraisal should be free unless you are tight on Loan-to-value.

 

[Carpediem]

I would tend to favor Heloc from a different financial institution than one holding my mortgage.

Why is that?

Also, one question would be, did either pull out of HELOC market during financial crisis?

I don't know the answer.

Appraisal should be free unless you are tight on Loan-to-value.

Yes, I agree. After looking at the PenFed fine print, I don't think there would be an appraisal cost.

 

[ExFlyBoy5]

Also, one question would be, did either pull out of HELOC market during financial crisis?

Appraisal should be free unless you are tight on Loan-to-value.

PenFed has NOT done this to date, but there are no guarantees. As long as the LTV stays reasonable, I don't think they would call the notes. I would trust them more that the big-mega-banks to NOT do this.

 

[Dash man]

After reading the fine print in the loan paperwork, DW and I decided against using PenFed for a HELOC. Don’t recall the details of what made us shred the loan papers, but just encourage you to read everything closely.

 

[spncity]

I think you are liable to pay them the closing costs if you sell the house within a couple of years.

 

[brewer12345]

I did a PF HELOC a couple years ago. I picked them because they offered a 15 year interest-only product (long and easy terms), reasonable rates, and although they can be a little clueless on execution they generally do it all for free. I stayed within 80% LTV. They did an online "appraisal" that was maybe 8 or 10% under where I thought the house would actually sell at. They offered to do a real appraisal with me eating the fee, but I was not looking for the very last dollar on the line so I declined and went with their desk appraisal. It was fairly easy to get the deal done. I have not ever drawn on the line, but I don't imagine that it would be a problem.

 

[AndyS]

I am in the process of getting our ducks in a row (pre-retirement)

Perhaps not my business .... but why are you arranging a HELOC in advance?

I've been early retired 8 years and recently had no problem taking out a HELOC from Regions Bank to partially fund a second home purchase this year ... no appraisal or other fees.

(We have outstanding credit scores and our 4 year old primary residence is fully paid for though.)

We converted the amount used on that HELOC to a 15 yr fixed once the 0.99% six month introductory rate was up. I'm happy with the fixed rate we got and they gave us a full quarter point reduction to auto-debit the payment even. They did charge me $100 bucks to do the conversion for some reason, I didn't argue it.

We're normally Credit Union fans and customers of both PenFed and Denton Teachers, but Regions just had the best deal going for this particular situation. Plus they were local ... I could go down there & look the loan person in the eye.

...... (Btw, our house still has a small mortgage on it through US Bank.)

Planning to pay that off before you pull the plug?




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