HELOC from home improvements - advice wanted.

[szmaine]

I need to do my roof over and add/redo the attic/sloped ceiling insulation on our 1840 Cape which has an unholy slurry of about 3 inches rock wool, vermiculite and 150yrs of mouse shit.

Efficiency Maine has rebate programs for air sealing and insulation going on now where I could get a $1500 rebate so I want to take advantage of that. Usually I'd do insulating myself, but this is a freakin mess with the sloped part of the cape being only 6-8 inches thick I feel I need to do spray foam. Plus I'd have no help for a project that needs to happen from outside (through the roof  before it gets re-shingled).

Never having had one, I am totally unfamiliar with HELOCs. These are the ones I have available to me through my bank where I have my mortgage. It will be easy to get it through since I have my mortgage with them. No physical appraisal is needed and I already spoke with a loan officer and she felt that I'd easily qualify for 15000...the minimum is 10k, which I'm sure will be enough.

Please, check these out and help me figure out what is best.

1. Benefit Home Equity Flex
Fixed rate line of credit  3.75%
3 yr advance period, 15 yr repayment period

2. Benefit Home Equity Fixed
Fixed rate line of credit  4.99%
7 yr advance period, 15 yr repayment period

3. Benefit Home Equity Variable
Variable rate line of credit 3.25% Prime
10 yr advance period, 15 yr repayment period

*All have a $450 pre-payment fee if terminated in the 1st 36 months.
All have $10000 minimum.
Should be no closing costs.

Here's the Bank link if you want more details:
https://www.bangor.com/About-Us/Rates.aspx#15

[Mister Fancypants]

I need to do my roof over and add/redo the attic/sloped ceiling insulation on our 1840 Cape which has an unholy slurry of about 3 inches rock wool, vermiculite and 150yrs of mouse shit.

Efficiency Maine has rebate programs for air sealing and insulation going on now where I could get a $1500 rebate so I want to take advantage of that. Usually I'd do insulating myself, but this is a freakin mess with the sloped part of the cape being only 6-8 inches thick I feel I need to do spray foam. Plus I'd have no help for a project that needs to happen from outside (through the roof  before it gets re-shingled).

Never having had one, I am totally unfamiliar with HELOCs. These are the ones I have available to me through my bank where I have my mortgage. It will be easy to get it through since I have my mortgage with them. No physical appraisal is needed and I already spoke with a loan officer and she felt that I'd easily qualify for 15000...the minimum is 10k, which I'm sure will be enough.

Please, check these out and help me figure out what is best.

1. Benefit Home Equity Flex
Fixed rate line of credit  3.75%
3 yr advance period, 15 yr repayment period

2. Benefit Home Equity Fixed
Fixed rate line of credit  4.99%
7 yr advance period, 15 yr repayment period

3. Benefit Home Equity Variable
Variable rate line of credit 3.25% Prime
10 yr advance period, 15 yr repayment period

*All have a $450 pre-payment fee if terminated in the 1st 36 months.
All have $10000 minimum.
Should be no closing costs.

Here's the Bank link if you want more details:
https://www.bangor.com/About-Us/Rates.aspx#15

Go with option 3 it gives you the most flexibility at the lowest rate, you can immedietely pay back an funds you don't need, you only get charged if you close the line in 3 years not pay back the initial amount borrowed (although confirm with your lender, I know that was the case with mine). You can have a $0 balance but need to keep the HELOC open for at least 3 years to not incur the charge.

If I am correct in the charge it is a no brainer, and then you have access to a HELOC for 10 years if you need in the future.

-Mister FancyPants

[szmaine]

I am confused about that fee...it say it a prepayment fee but if I think its if you pay off the whole amount rather than just the part you don't need??? I'll double check on it.
Should I not be worried about rates going up too much? I can pay this all back pretty quick I think...variables rate sounds scary to me.

[Mister Fancypants]

I am confused about that fee...it say it a prepayment fee but if I think its if you pay off the whole amount rather than just the part you don't need??? I'll double check on it.
Should I not be worried about rates going up too much? I can pay this all back pretty quick I think...variables rate sounds scary to me.

Prime is a margin over the Fed funds rate which at the earliest is going to be raised mid next year and even when it does it will raise slowly so you still have 1/2 a point until the next rate you mentioned.

You said you can pay this back quickly, so it sounds like it will cost you more to take a fixed higher rate then to simply pay it back sooner at the lower rate.

Confirm the fee, also run some numbers even with the $450 the cheaper rate might be cheaper at the lower rate depending on how much you borrow and for how long.

[szmaine]

Ok, thanks a lot!

[Mister Fancypants]

Good luck with the roof!

[NV Teacher]

which has an unholy slurry of about 3 inches rock wool, vermiculite and 150yrs of mouse shit.

No advice on your question, but your post does make me wonder about the R-value on 150 years of mouse shit. :)