ken a.k.a OMK
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They killed Kenny, the bastards.
Joined: Dec 21, 2010 14:39:20 GMT -5
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Post by ken a.k.a OMK on Mar 6, 2019 14:11:53 GMT -5
That's right and probably the problem. We wanted a HELO for $130,000 to help our son with a bridge loan between buying a house and selling a house (maybe 2 months). The interest was less then we were making on our investments therefore we didn't want to cash any in. I thought we'd have no problem. We have $2.8M in funds and own our house (valued at $400k). We only got approved for $80k. It was because we are retired and our income is small (but all we need). It is based on income, ability to pay, not assests.Why couldn’t you just give your son your own money I stead of dealing with loans? Just for my infozzz Because the HELO interest rate was 3% and we would pay back whatever we borrowed in a few months. We were getting 12% on our investments and if we cashed them in we'd have that money (cash) sitting around after our son payed us back. And as someone said you have the loan for 10 years and only pay interest on what you borrow. After that 2 months (very little interest payed) and paying back what was borrowed we have a $130k line of credit for 10 years. Balance is zero now so no interest payments.
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raeoflyte
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Post by raeoflyte on Mar 6, 2019 14:12:15 GMT -5
Probably not going to get a HELOC or any other type of loan because there is probably not enough income to justify the loan. The lender doesn't want to have to reposess the home to get their money back. That's right and probably the problem. We wanted a HELO for $130,000 to help our son with a bridge loan between buying a house and selling a house (maybe 2 months). The interest was less then we were making on our investments therefore we didn't want to cash any in. I thought we'd have no problem. We have $2.8M in funds and own our house (valued at $400k). We only got approved for $80k. It was because we are retired and our income is small (but all we need). It is based on income, ability to pay, not assests.This isn't always true, at least for 1st mortgages. Conventional guidelines will allow you to use assets as an income source if you meet the criteria.
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ken a.k.a OMK
Senior Associate
They killed Kenny, the bastards.
Joined: Dec 21, 2010 14:39:20 GMT -5
Posts: 14,115
Location: Maryland
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Post by ken a.k.a OMK on Mar 6, 2019 14:20:47 GMT -5
This was a HELOC. After banks got into trouble with loose lending practices they tightened up their guidelines. For this loan they only looked at income and our ability to make monthly payments only based on income. Being retired our income was only about $100k. As I stated having access (could convert to cash in a week) to $2.8M didn't matter to them.
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ken a.k.a OMK
Senior Associate
They killed Kenny, the bastards.
Joined: Dec 21, 2010 14:39:20 GMT -5
Posts: 14,115
Location: Maryland
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Post by ken a.k.a OMK on Mar 6, 2019 14:41:02 GMT -5
I remember a time when HELOC loans were based on the equity in your house. They'd advertise lending you 80%, then 100%, some even 110%. Not based on you ability to pay.
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hoops902
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Post by hoops902 on Mar 6, 2019 14:42:46 GMT -5
I remember a time when HELOC loans were based on the equity in your house. They'd advertise lending you 80%, then 100%, some even 110%. Not based on you ability to pay. I remember a time the value of your house was determined by how much you felt like borrowing for it.
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garion2003
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Post by garion2003 on Mar 6, 2019 14:51:02 GMT -5
Go to a small local bank or credit union and ask for a HELOC. ETA: I do bank work for 3 local banks. I can process a HELOC in about 2 weeks after a commitment letter is issued. The application process is probably about as fast as you can get them your information. I just did a HELOC through my credit union (it holds the first mortgage also). Literally filled out the application on Feb 1, closed on March 1.
And the Feb 1 is a little off, because I was initially denied (I had asked for TOO SMALL of credit line, their minimum is 25k). Someone reached out to me, I applied again. I submitted a pay stub and a new insurance binder. Before the closing even had happened I got the checks for the line of credit in the mail.
It was easy. I am hoping not to tap it (10 year draw) but since I have house projects and wanted to spend down some cash, it's good to have this in reserve or anything unexpected.
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resolution
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Post by resolution on Mar 6, 2019 15:04:07 GMT -5
My state charges a recordation tax on the full amount of a credit line, regardless of whether you ever actually withdraw and use the money. It's bad enough that you have to pay the state to access your own equity, but they have it set up so you pay for the potential to access your own equity, even if you never do.
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debthaven
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Post by debthaven on Mar 6, 2019 15:24:27 GMT -5
Can you update us on the rest? Do you still own the fruit/veg store or did you sell it? Is your DD through with school? Is she working now?
Best of luck to you.
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azucena
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Post by azucena on Mar 6, 2019 15:30:18 GMT -5
Why not just commit the ultimate YM sin and put the vacation you deserve on a credit card?
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Deleted
Joined: May 9, 2024 2:02:28 GMT -5
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Post by Deleted on Mar 6, 2019 15:51:02 GMT -5
This was a HELOC. After banks got into trouble with loose lending practices they tightened up their guidelines. For this loan they only looked at income and our ability to make monthly payments only based on income. Being retired our income was only about $100k. As I stated having access (could convert to cash in a week) to $2.8M didn't matter to them. Yeah, banks can be silly. We applied for a mortgage 1 year after I retired; DH had been retired for years and was collecting SS and we had about the same level of invested assets you did. They had actually increased by $100K in the year since I retired. They seemed to care only about DH's SS and my $900/month pension and would lend us only $100K instead of the $150K we'd applied for. We were buying a $250K house so loan-to-value was not the issue. Made no sense to me.
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ken a.k.a OMK
Senior Associate
They killed Kenny, the bastards.
Joined: Dec 21, 2010 14:39:20 GMT -5
Posts: 14,115
Location: Maryland
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Post by ken a.k.a OMK on Mar 6, 2019 16:04:29 GMT -5
The end of our HELOC story is the bank manager, knowing we were well enough off to not need his business, heck he knew they'd get some interest from us, went over our income making sure we didn't forget anything. When he mentioned did we have any other distributions, my wife said yes I had my first RMD (required minimum distribution from an IRA) of $35k. Ah ha income of $35k we didn't include in the application. At that point they were able to recalculated and offered us more.
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tloony
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Post by tloony on Mar 6, 2019 16:22:12 GMT -5
Can I talk to my mortgage bank? I just need to know what to say because they seem o my want me to be behind. If I am current - nothing is happenning. But maybe there is a way? Yes. What bank do you use? Chase God Bless them. Lol
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tloony
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Post by tloony on Mar 6, 2019 17:33:52 GMT -5
Can you update us on the rest? Do you still own the fruit/veg store or did you sell it? Is your DD through with school? Is she working now? Best of luck to you. Hey! Thanks for asking. Store was sold after 7 years. DD graduated as a recreational therapist. Loving her job that pays nothing. Lol Working another job that she loves as well. Living on her own. Husband on SSD. I am working as an aide. Loving it. Scrubs look sexy on me! I’ve lost 75lb so everything looks good on me now! Lol I am looking for better paying job. Not really looking but hoping it’ll fall into my lap. Smart, right? Lol Well. I think I’ll have to make a thread in off topic forum. And I want to change my name. Can I? You guys are all still here...it’s awesome!
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tloony
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Post by tloony on Mar 6, 2019 17:35:15 GMT -5
Why not just commit the ultimate YM sin and put the vacation you deserve on a credit card? No cc. Just debit. I’ve learned my lesson! So no sins in that department. Lots in other. Lmao
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laterbloomer
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Post by laterbloomer on Mar 6, 2019 21:16:03 GMT -5
Can you update us on the rest? Do you still own the fruit/veg store or did you sell it? Is your DD through with school? Is she working now? Best of luck to you. Hey! Thanks for asking. Store was sold after 7 years. DD graduated as a recreational therapist. Loving her job that pays nothing. Lol Working another job that she loves as well. Living on her own. Husband on SSD. I am working as an aide. Loving it. Scrubs look sexy on me! I’ve lost 75lb so everything looks good on me now! Lol I am looking for better paying job. Not really looking but hoping it’ll fall into my lap. Smart, right? Lol Well. I think I’ll have to make a thread in off topic forum. And I want to change my name. Can I? You guys are all still here...it’s awesome! So you've been a computer programmer, a store owner and now a nurse's aide? How do you do that?
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CCL
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Post by CCL on Mar 6, 2019 21:16:11 GMT -5
Probably not going to get a HELOC or any other type of loan because there is probably not enough income to justify the loan. The lender doesn't want to have to reposess the home to get their money back. That's right and probably the problem. We wanted a HELO for $130,000 to help our son with a bridge loan between buying a house and selling a house (maybe 2 months). The interest was less then we were making on our investments therefore we didn't want to cash any in. I thought we'd have no problem. We have $2.8M in funds and own our house (valued at $400k). We only got approved for $80k. It was because we are retired and our income is small (but all we need). It is based on income, ability to pay, not assests.We found that out when buying this house. I had talked with my loan officer in advance, so knew all I had to do was set up an automatic monthly withdrawal from our 401k. After 6 months the banks considered it income.
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CCL
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Post by CCL on Mar 6, 2019 21:17:26 GMT -5
I remember a time when HELOC loans were based on the equity in your house. They'd advertise lending you 80%, then 100%, some even 110%. Not based on you ability to pay. In my experience, it was based on both.
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ken a.k.a OMK
Senior Associate
They killed Kenny, the bastards.
Joined: Dec 21, 2010 14:39:20 GMT -5
Posts: 14,115
Location: Maryland
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Post by ken a.k.a OMK on Mar 6, 2019 21:20:53 GMT -5
Another thing for not using our own money, cashing in investments, is that we'd have to pay tax on the $130k all in one year. Also the HELOC had not fees or closing costs.
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tloony
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Post by tloony on Mar 7, 2019 8:40:15 GMT -5
Hey! Thanks for asking. Store was sold after 7 years. DD graduated as a recreational therapist. Loving her job that pays nothing. Lol Working another job that she loves as well. Living on her own. Husband on SSD. I am working as an aide. Loving it. Scrubs look sexy on me! I’ve lost 75lb so everything looks good on me now! Lol I am looking for better paying job. Not really looking but hoping it’ll fall into my lap. Smart, right? Lol Well. I think I’ll have to make a thread in off topic forum. And I want to change my name. Can I? You guys are all still here...it’s awesome! So you've been a computer programmer, a store owner and now a nurse's aide? How do you do that? What seems to be a challenge for you dear?
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laterbloomer
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Post by laterbloomer on Mar 7, 2019 9:32:19 GMT -5
So you've been a computer programmer, a store owner and now a nurse's aide? How do you do that? What seems to be a challenge for you dear? It's a wide ranging skill set. How do you switch careers like that?
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