March 31st, 2016 9:55 AM by Joan Rusco
We just can’t help but take notice on the 1st of April of that infamous day. We also can’t help but brag a bit that our clients at VALoansMN are no fools. Veterans take notice of opportunities and here’s one to see.
Are you among those who took out a home equity line of credit (HELOC) a decade ago when home prices were peaking? If so, you may be among those who is now receiving notice that your heloc payment is going way, way up! Here’s what’s happening and here’s how we may be able to help.
Banks were pushing HELOCs ten years ago to help homeowners pay off other debt or fix up the house. It was an inexpensive and tax favored way to borrow. Inexpensive because HELOCs are like having a pile of cash to use as you wished and the only payment was for the interest only. If you used it to improve your home you could write off the payment against your income for tax purposes. For ten years you only had to pay interest only on the loan. But now the ten year “interest only” feature is over or coming to an end.
If you borrowed $50,000 at 8.25% in 2006 your monthly interest only payment during this “interest only” period would be about $344. Here’s what’s happening now as the ten year interest only period comes to an end. The bank is recasting your line of credit into a 15 year 2nd mortgage. The payment increases from about $333 to about $478. That’s an increase in your monthly payment of about 43%! Can you afford that? There’s a reason these instruments are called “HELOCs from Hell?. Maybe we can help.
Now be the time for you to contact us at VALoansMN and let’s see if we can roll your existing first mortgage and your heloc into one VA guaranteed home loan at today’s very low rates. We guaranty we’ll be able to cut your monthly payment way below what you’ll be paying on that existing 8.25% home equity line of credit as its interest only period ends.
Home equity loans were great when home prices were soaring and you needed cash to cover that new kitchen, bath, roof and other remodel projects. But now you are going to pay a steep price as the heloc is recast into a 15 year second mortgage. Let’s see if we can help with a VA Loan. Call Brad today and let him make it happen for you!