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BabyAvocado
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Member since 5/05 17334 total posts
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HELOC vs Home Equity Loan
Talk to me about the pros and cons of a variable rate HELOC vs a fixed rate Home Equity Loan for the purposes of home improvements with a term of 15 - 30 yrs.
Did you do either one?
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Posted 5/9/06 8:51 AM  |
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Lisa
I'm a PANK!!!
Member since 5/05 22334 total posts
Name:
Professional Aunts No Kids
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Re: HELOC vs Home Equity Loan
for us, we went with a HELOC because we didnt need the money right away but wanted to be able to draw against the house if we needed it.
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| Posted 5/9/06 9:03 AM |
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Leeners
:)
Member since 5/05 4898 total posts
Name:
Eileen
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Re: HELOC vs Home Equity Loan
We did a HELOC as well for pretty much the same reason as Lisa. We didn't want to guess-timate the amount we'd need and either be over (but still have to pay it back) or under (and then what happens??) with a loan. Plus, the HELOC will now just stay open while we're living here. God forbid something happens where we need a chunk of money, it's right at our fingertips.
The variable rate is a bit of a deterrent but IMO it's good because it'll make you think twice before using it on something that may not be necessary.
ETA: I'm very glad we went with the HELOC because we managed to use far less than we originally thought from it due to unforseen $ coming in at the right time (the seller had to concede a ton of money, we had an unexpected estate cash flow  and decided to use some of our savings as well). At this point, we will probably use less than 40% of the HELOC. If we had taken out a loan, we would have taken out at least the amount we opened the HELOC for and then we'd have to pay it back. While you can pay it back immediately, really, it wouldn't all go back, at least not for us.
Message edited 5/9/2006 9:15:00 AM.
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| Posted 5/9/06 9:08 AM |
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luvsun27
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Member since 5/05 8135 total posts
Name:
Kim
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Re: HELOC vs Home Equity Loan
We did the HELOC because we just wanted to pull what we needed. However, the interest rates have gone up so much and it's not fun paying it back at 10% 
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| Posted 5/9/06 9:12 AM |
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Lisa
I'm a PANK!!!
Member since 5/05 22334 total posts
Name:
Professional Aunts No Kids
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Re: HELOC vs Home Equity Loan
Posted by luvsun27
We did the HELOC because we just wanted to pull what we needed. However, the interest rates have gone up so much and it's not fun paying it back at 10%
You should try and negotiate your HELOC. go to your bank and see if you can get the rate lowered. My bank, Chase is offering .25-.50% off of prime right now
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| Posted 5/9/06 9:14 AM |
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anon
where's winter?
Member since 11/05 2209 total posts
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Re: HELOC vs Home Equity Loan
Posted by Lisa
You should try and negotiate your HELOC. go to your bank and see if you can get the rate lowered. My bank, Chase is offering .25-.50% off of prime right now
how does one go about negotiating? we have been paying an extra 1000K/month towards principal for a year, but that is going to come to a halt when  arrives in the coming weeks. our rate is now 8 point something
our accounts are with citibank...
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| Posted 5/9/06 11:05 AM |
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Lisa
I'm a PANK!!!
Member since 5/05 22334 total posts
Name:
Professional Aunts No Kids
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Re: HELOC vs Home Equity Loan
I would call the bank and ask them how do you go about lowering the rate on your loan. They will have suggestions
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| Posted 5/9/06 11:18 AM |
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anon
where's winter?
Member since 11/05 2209 total posts
Name:
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Re: HELOC vs Home Equity Loan
Posted by Lisa
I would call the bank and ask them how do you go about lowering the rate on your loan. They will have suggestions
so similar to getting a credit card rate down...
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| Posted 5/9/06 11:21 AM |
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june262004
But I love the Snow!
Member since 5/05 15379 total posts
Name:
Kristin
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Re: HELOC vs Home Equity Loan
I work for WAMU and went with our HELOC. I liked it because I didn't have to use it right away but it was there if I needed and when I did use it I only paid back what I used. AND we actually have a FIXED RATE OPTION. So you can lock some of it into a fixed rate. Its a beautiful thing. You get the best of both worlds kinda  If you have any questions let me know and good luck 
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| Posted 5/9/06 2:35 PM |
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june262004
But I love the Snow!
Member since 5/05 15379 total posts
Name:
Kristin
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Re: HELOC vs Home Equity Loan
Posted by luvsun27
We did the HELOC because we just wanted to pull what we needed. However, the interest rates have gone up so much and it's not fun paying it back at 10%
Kim why don't you see if you can get the fixed rate like I talked about. Im pretty sure we are the only one that offers it but you never know
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| Posted 5/9/06 2:38 PM |
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