Home equity loan (1 Viewer)

[STEADYMOBBIN 22]

I want to move. To get the best money from my house I'd like to redo our master bathroom and a couple other little things around the house to spruce it up before I put it on the market.

I have never done a home-equity loan before and wouldn't know the first place to start. Do I first start with my current lender or are there better options out there?

Would it not be wise to take a home-equity loan out just a few months prior to putting the house on the market? I plan on paying everything off with the proceeds from the sale of the house but how will that affect my credit rating moving forward to purchase the new house?

Thanks in advance for any suggestions or advice.

 

[(HULK)]

Chances are strong that you won't get the money back you put into the upgrades. So, don't do them.

 

[Cjw_55106]

I dont know why you wouldnt shop around as opposed to going to one bank. That being said, I think you should really consider whether its worth it or not. Generally speaking, a master bedroom upgrade does not bring in a higher value for a home.

I dont know how the loan would affect your credit.

 

[Chemical X]

how much money you need? sounds like a 10-15k job......

 

[ChiefD]

Have a real estate agent run comps for your neighborhood to see if it's even necessary.

 

[comfortably numb]

How much do you think you can get for your house now?

How much will these upgrades cost you?

How much do you think you can get for your house after these upgrades?

I think the only way I would do this is

if the bathroom currently is pretty bad

if this is mainly the only part of the house needing some TLC and this will give it that extra kick

if your market is really hot and houses are moving fast and all selling with great master bedrooms

 

[STEADYMOBBIN 22]

The bathroom is gutted and was pretty dated before. Second-floor hall bathroom could also use an upgrade.

I just redid the entire first floor, added more hardwood in stained all to match with upgraded base and OG, cherry morning, crown molding in, casing, new six panel doors, new ceramic floors in the kitchen, new cabinets, new appliances.

I did it all myself and it cost me well under $10,000.

I would be doing the kitchen as well as some other stuff around the house and I'm just a little bit cash poor at the moment with all those other renovations.

The home-equity line of credit just came to mind to get some quick cash and get it done quicker without having to wait another year to save. I am very motivated to sell.

 

[comfortably numb]

So the HELOC would be for the master bath and you yourself are redoing the kitchen as well?

 

[STEADYMOBBIN 22]

So the HELOC would be for the master bath and you yourself are redoing the kitchen as well?

I already did the kitchen.

I know the single biggest objection is going to be the roof. With $10-$15,000 I can renovate both bathrooms with marble new fixtures and tops and I can replace the entire roof.

If The prospective homebuyers home inspector is any good he's going to let them know that they're going to need a new roof in the next 2 to 5 years max. It will cost a regular Joe $25-$30,000 to get this roof replaced with all new gutters downspouts drippage ice and water shield and the like.

On the flipside me in some autotrain labor can do all of that for about $7000.

I believe if I renovate my two bathrooms and replace the roof I will attract a lot of buyers. More so then if I don't do these things. These are renovations that need to be done whether I'm here or not and if I can take away those objections I believe I can have a quick sale..

If I can't get the money back or sell the house these are things that need to be done anyway so it's not a loss.

 

[comfortably numb]

I applied for a HELOC this year.

Haven't used it just liked the option.

I got 3.5%

Whole process took about 4-5 weeks.

He said they have done them as quick as 2 weeks and as long as 12 weeks.
Depends a lot on how fast you can get them info.

Also, keep in mind

Your house in the equity to obtain a HELOC, there might be issues when you sell your house.

I am trying to recall what the lender told me so ask this before hand.

I could have sworn he said there were RE transaction issues when a seller has an open HELOC that is tied to the house they are selling.

Whether the lender to the buyer was giving them a hard time or something else.

I know I'm not making sense but when he mentioned it, it made sense-especially being a RE agent. I'm just blanking right now.

I would start with your current bank and you can shop around.

Some places will offer a $500 gift card or some crap.

I ended up with Wells Fargo

Do you have any other loans out?

(aside from a mortgage)

any property liens?

 

[STEADYMOBBIN 22]

I do not have any other liens.

The house is in my wife's and my name but I'm the only one on the mortgage.

She has an auto loan.

Other than that we have zero debt.

 

[comfortably numb]

I do not have any other liens.

The house is in my wife's and my name but I'm the only one on the mortgage.

She has an auto loan.

Other than that we have zero debt.

Ok.

They will ask you how much you want. I said give me the most.

Apparently they can't just do that, they need a number.

I said ok...100K?

I was declined for 100k....but...they were able to offer me 97,500

The amount you get will depend how much equity you have in your house and income and debt and all that stuff you already know.

 

[Plorfu]

I do not have any other liens.

The house is in my wife's and my name but I'm the only one on the mortgage.

She has an auto loan.

Other than that we have zero debt.

Ok.

They will ask you how much you want. I said give me the most.

Apparently they can't just do that, they need a number.

I said ok...100K?

I was declined for 100k....but...they were able to offer me 97,500

The amount you get will depend how much equity you have in your house and income and debt and all that stuff you already know.

There might be restrictions based on location, as well. Some states can only go to XX% of loan-to-value, for example.

 

[Bull Dozier]

One other thing to consider; at least with my HELOC, there were no fees to close (maybe $50 or something?) At closing the guy said most of the up front fees were waived, but they would become due if the loan was closed in less than some period of time I don't remember. If you take out a HELOC and try to pay it off and close it (you'd have to if you sold the house), there'd be extra fees due most likely.

 

[gianmarco]

There are TONS of HELOCs and usually local banks can do the best with them. I found a local bank that gave a 95% LTV, no closing costs, and no prepayment penalties on 25 yrs. Initial rate was 2.95% and then went up to prime after 1 year. I've never had to use it but it was great to get it established.

For you, the LTV is probably not important if you only need a certain amount and it's short term. What you want to look for is no closing costs and no penalties for paying it back early. You should also be able to get a good introductory rate.

Good luck.

 

[STEADYMOBBIN 22]

Thank you for mentioning the early pay off penalties!

 

[The Big Guy]

The bank that I work for has an early closure fee of $450 if you close the line of credit within 3 years. You can look for a loan and not a line and should have no early payment issues, but you get full cash on day 1 that you are paying p&i on while you could usually go interest only on a helicopter to keep payment low while house reno is going on and while selling to keep payment low.

 

[Ratbert]

So the HELOC would be for the master bath and you yourself are redoing the kitchen as well?

I already did the kitchen.

I know the single biggest objection is going to be the roof. With $10-$15,000 I can renovate both bathrooms with marble new fixtures and tops and I can replace the entire roof.

If The prospective homebuyers home inspector is any good he's going to let them know that they're going to need a new roof in the next 2 to 5 years max. It will cost a regular Joe $25-$30,000 to get this roof replaced with all new gutters downspouts drippage ice and water shield and the like.

On the flipside me in some autotrain labor can do all of that for about $7000.

I believe if I renovate my two bathrooms and replace the roof I will attract a lot of buyers. More so then if I don't do these things. These are renovations that need to be done whether I'm here or not and if I can take away those objections I believe I can have a quick sale..

If I can't get the money back or sell the house these are things that need to be done anyway so it's not a loss.

Kitchens and bathrooms are where you want to put your money if you are looking to sell, so you are on the right track.