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HELOC - Best Deal
May 5, 2024
10:35 am
retirement101
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Looking for HELOC - Home Equity Line of Credit … any suggestions what is the best rate offering available? Do we normally pays any yearly fees for the line of credit? And for the property appraisal, do I pay any charge or bank/broker pays it? Thanks

May 5, 2024
9:31 pm
RetirEd
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My friends with HELOCs don't pay any annual fees. The HELOCs tend to have slightly higher interest rates than the base mortgage though, so they all split them to leave most of the mortgage conventional. One person told me today they were with Scotia.

RetirEd

May 5, 2024
10:18 pm
smayer97
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retirement101 said
Looking for HELOC - Home Equity Line of Credit … any suggestions what is the best rate offering available? Do we normally pays any yearly fees for the line of credit? And for the property appraisal, do I pay any charge or bank/broker pays it? Thanks  

For rates and flexibility, shop around. You also have to consider convenience for adjusting the HELOC limit...not sure how the limit gets adjusted if the mortgage is at a different FI than the HELOC.

You only ever pay the interest on any money borrowed from the HELOC, like a cash advance on a no-fee credit card. No charges for not using it.

When you are setting up a HELOC to an existing mortgage, there are legal fees. If you want to base the HELOC based on the appraisal for the original mortgage, you may not need a new appraisal. If you do need one, you might be able to get the bank to absorb the cost. One way is to refinance instead...

The possible advantage of refinancing, is that the bank might waive the appraisal fee, maybe even the legal fees. And depending on the flexibility of the HELOC provider, you might be able to pay back the extra refinanced amount quickly, which increases your HELOC limit.

So you need to see what costs the FI is willing to cover and on what conditions; HELOC only vs refinance + HELOC.

Just do not show all your cards with the FI if you are seeking to pay back the extra refinanced part quickly.

May 7, 2024
10:34 pm
RetirEd
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And remember that, unlike a credit card, there is no grace period on a HELOC - interest is charged instantly on every penny.

A carefully managed revolving credit card is cheaper than a HELOC for this reason, though the amount is more limited.

RetirEd

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