Author Topic: Best lenders for HELOC  (Read 462 times)

shanaling

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Best lenders for HELOC
« on: October 25, 2020, 10:58:59 AM »
Anyone have recs for best lenders for HELOC? No-fee lenders? Anyone use HELOC to replace primary residence who can speak about their experience? Thanks

uniwelder

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Re: Best lenders for HELOC
« Reply #1 on: October 25, 2020, 12:10:45 PM »
I don't have any recommendation for lenders, but its important to be aware a HELOC is in the same category on your credit score as a credit card, not loans.  If you take out a big heloc, your credit utilization % will skyrocket.  In my case, the score dropped 50 points.  Once you convert your heloc for repayment, the score should immediately normalize, but I understand some lenders might not allow you to convert for repayment until after first year or two.

AMandM

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Re: Best lenders for HELOC
« Reply #2 on: October 28, 2020, 03:05:44 PM »
If you want a second-hand rec, our mortgage guy recommended Navy FCU for HELOCs, though this was 5 years ago.

katsiki

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Re: Best lenders for HELOC
« Reply #3 on: October 28, 2020, 05:10:48 PM »
Had a great experience with Hanscom FCU years ago.

https://www.hfcu.org/loans-and-credit-cards/home-equity.html

Did not replace primary mortgage (if that is what you mean).

I am not sure the info about credit score is accurate.  I have only seen heloc's reported like a mortgage but my experience is somewhat limited.

uniwelder

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Re: Best lenders for HELOC
« Reply #4 on: October 29, 2020, 05:50:56 AM »

I am not sure the info about credit score is accurate.  I have only seen heloc's reported like a mortgage but my experience is somewhat limited.


Was yours actually a line of credit or a home equity loan?  In my case, the heloc shows up in the revolving credit category.  I'm not a banker, so can only speak of my experience, but after seeing what happened to my score, I investigated a little to figure out why.  Here's a link that explains more---  https://www.credit.com/blog/how-helocs-impact-your-credit-score-63787/

If you happen to get a large heloc and not use much of it, it could boost your score, but utilizing the whole thing can do a bit of harm.  A 200k heloc (maxed out) to replace your mortgage, with another 100k available from credit cards would put you at 66% credit utilization and cause a big credit score drop.  Supposedly, you want utilization to be less than 30%.

katsiki

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Re: Best lenders for HELOC
« Reply #5 on: October 31, 2020, 06:32:48 PM »

I am not sure the info about credit score is accurate.  I have only seen heloc's reported like a mortgage but my experience is somewhat limited.


Was yours actually a line of credit or a home equity loan?  In my case, the heloc shows up in the revolving credit category.  I'm not a banker, so can only speak of my experience, but after seeing what happened to my score, I investigated a little to figure out why.  Here's a link that explains more---  https://www.credit.com/blog/how-helocs-impact-your-credit-score-63787/

If you happen to get a large heloc and not use much of it, it could boost your score, but utilizing the whole thing can do a bit of harm.  A 200k heloc (maxed out) to replace your mortgage, with another 100k available from credit cards would put you at 66% credit utilization and cause a big credit score drop.  Supposedly, you want utilization to be less than 30%.

You're probably correct.  Good info for folks to check into either way.

My experience was a HELOC but we immediately fixed it.  That may have changed the reporting and skewed my experience.