No Cost HELOC??

[cyber888]

I got a No Cost HELOC from Third Federal at 2.24%. Well, it's a negative cost HELOC because they gave me a free $100 Home Depot card.

 

[Dtail]

On a related note, do they revaluate your house when one gets a HELOC and thus might pay higher taxes?

 

[jazz4cash]

I got a No Cost HELOC from Third Federal at 2.24%. Well, it's a negative cost HELOC because they gave me a free $100 Home Depot card.

Recently? How long did it take? I got mine 2 yrs ago and I think it took about 30 days but I hear they are backed up now but they continue to promote.

 

[cyber888]

Recently? How long did it take? I got mine 2 yrs ago and I think it took about 30 days but I hear they are backed up now but they continue to promote.

They took up to almost 60 days now .. I got it early Jan.2021. It was a long wait.

 

[Golden sunsets]

Not much to add to the excellent responses and ideas here, except to say we did this twice in succession (two homes, one after the other). Worked exactly as advertised and our only costs were interest and in the second case, closing the line as well because it was within 3 years and we were selling the home.

It was BoA each time. Their process is klugey and slow but their rates are competitive at least.

Im not sure if this is a new requirement on BOA Helocs but you can no longer use the funds to purchase another home. One could argue, just don't tell them the true purpose of the Heloc, but I'd feel uncomfortable doing that. Also their rates on Helocs aren't competetive, even with the loyalty discount.

I'm the OP. We decided to apply for a HELOC which is fixed at 1.99% until the end of 2022. The only cost, aside from interest at draw down, is a $300 fee to close the line, if within 3 years. If all goes well, we will buy our next home, utilizing the HELOC to supplement the all cash offer, put our house on the market immediately and sell at a price within striking distance of the ridiculously high number our broker gave us earlier this week. [emoji3]

 

[GTFan]

That's a good rate, where did you get that HELOC?

 

[2177V]

Im not sure if this is a new requirement on BOA Helocs but you can no longer use the funds to purchase another home. One could argue, just don't tell them the true purpose of the Heloc, but I'd feel uncomfortable doing that. Also their rates on Helocs aren't competetive, even with the loyalty discount.
[emoji3]

The interest rates are based on the assumption that the HELOC is against your principle home. Borrowing on rental properties are normally 1/2% higher due to the higher risk of a rental property.

However, People would buy the rental property using HELOC money on their principle house but before they rent the new property out, they would apply for a HELOC to another bank and claim that the new property is a newly acquired principle house. The end result are two HELOC with interest rates based on principle home.....and not one on principle property and the other on a rental property which should be 1/2% higher.

I believe some banks have gotten wise to this practice...but not all of them.

 

[RetiredHappy]

Im not sure if this is a new requirement on BOA Helocs but you can no longer use the funds to purchase another home. One could argue, just don't tell them the true purpose of the Heloc, but I'd feel uncomfortable doing that. Also their rates on Helocs aren't competetive, even with the loyalty discount.

I'm the OP. We decided to apply for a HELOC which is fixed at 1.99% until the end of 2022. The only cost, aside from interest at draw down, is a $300 fee to close the line, if within 3 years. If all goes well, we will buy our next home, utilizing the HELOC to supplement the all cash offer, put our house on the market immediately and sell at a price within striking distance of the ridiculously high number our broker gave us earlier this week. [emoji3]

I had HELOC with BOA and used it to purchase another home while I was in the process of selling the home where the HELOC was on. It worked out well. There was never a question on how we would use the HELOC. In fact the BOA guy advised us to do it this way.

 

[Golden sunsets]

I had HELOC with BOA and used it to purchase another home while I was in the process of selling the home where the HELOC was on. It worked out well. There was never a question on how we would use the HELOC. In fact the BOA guy advised us to do it this way.

Great for you, but not what our BOA guy told us and what DS's BOA guy told him.

When did you do this deal? Perhaps their policy has changed.

 

[GTFan]

So OP did you end up with a BoA HELOC this time?