The bank is offering a line of credit sale. I pay no fees, the bank is covering all closing costs, state taxes, appraisal fees and the first year annual fee. I can take out a line of credit on the equity of my house. The rate is prime minus 1/2.
What is in it for them? Could there be a hidden downside for me? What do you think?
2007-10-20 09:30:09 · 6 answers · asked by moviefan2020 2 in Business & Finance ➔ Personal Finance
This sounds normal to me. They make their money on the interest and incidentally, you must have good credit becuase prime minus half is good. I don't think their costs incurred are all that much and half the time the appraiser doesn't even look inside the house. It's basically a good source of low cost credit for people with equity in their homes. (low risk for them.) I assume it's a reputable bank.
2007-10-20 09:58:37 · answer #1 · answered by Just Askin' 2 · 0⤊ 0⤋
Yes it is too good to be true. Check with your local bank and you'll see what rates are doing these days. I work in the mortgage industry and from what I've seen lately is the market is holding somewhat steady, but prime - .50% is obscene......not gonna happen. Also, typically on a HELOC there are no appraisal fees. I've never heard of an annual fee on a HELOC either. Be careful.
2007-10-20 10:56:14 · answer #2 · answered by os2valswife 1 · 0⤊ 0⤋
I am sure it is a variable rate as most home equity loans are. They also have a second mortgage on your house once you take out said loan. Unless you really need the loan, I would recommend not doing it. If you were otherwise not planning on doing it, don't do it.
2007-10-20 11:43:19 · answer #3 · answered by Lesley 5 · 0⤊ 0⤋
You owe the money. they're going to in all probability sue you ultimately and get a judgment. With the judgment, they could garnish your wages, grab your economic employer bills and lien your genuine sources. Judgments are valid for a protracted time - 2 a protracted time in some jurisdictions and earn pastime at extra effective than marketplace fees till paid in finished. BTW, the economic employer foreclosed, you probably did no longer.
2016-10-04 05:54:37 · answer #4 · answered by ? 4 · 0⤊ 0⤋
I got a similar offer a while ago, the hook was that you had to borrow $10,000. I didn't need the money and passed, but if you were going to borrow anyway, not a bad deal unless the rate adjusts later.
2007-10-20 09:55:55 · answer #5 · answered by Anonymous · 0⤊ 0⤋
An obscene % rate after the teaser rate expires ?
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2007-10-20 09:38:30 · answer #6 · answered by kate 7 · 0⤊ 0⤋