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Applying for HELOC with or without spouse??


oedipusmaas
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Hi,

I have a question here...I currently have a HELOC at Countrywide and it suddenly went up to 9.25%...I'm seeing that most banks have better rates, including ING, which is at 7.25% with no fees. So I am looking to shop around.

My husband has less than perfect credit (low 600's, has always been a cash person). I would like to have him be the co-borrower for this new HELOC to help him establish a little credit, but would having his lower score on the application alter the kind of rates I qualify for? My current score is 800+....

Also, once approved, I assume they just send me a check and I write one back to Countrywide for my full balance, correct??

Thanks for any advice.

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Often things advertized are for CLTV/LTV < 80% (I looked at their page and it shows 'as low as 7.25%'; they don't detail anything)

A HELOC might not be the best to have on the DHs CR since it could skew his utilization and look like a large revolving account.

What is the balance of the 1st mortgage, the 2nd and the value of the home?

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Be bought the house for 580k, first is 475k, i have about 20k left on the second. Currently, houses on our block, around our size, have been selling for near 750K.

My FICO is close to 800, husband's is closer to 620-ish.

Perhaps I'll just do this HELOC on my own and then add DH onto my CC.

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I would suggest that you get a fixed rate 2nd (HELOAN), and pay off the CW loan. For many borrowers, they are a tad harder to get than a HELOC, but in your case you should have no problem.

Rates for HELOC"s could go very high as the Gvt spends more than it takes in. This causes the Fed to raise rates and as you know it gets passed on the next day as an increase in your rate.

Is your spouse on the loan for the first?

Charles

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Yes, the plus for HELOC's is that they are what the letters stand for "Line Of Credit". They are wonderful in some cases. If you have a business or investments where you need easy access to funds, and once they have served their purpose, you put the $ back, then that is great. I know of an investor that has a very large HELOC on his personal home. He buys a rehab home, fixes it up, and sells it. His plus is that if he sees a house that he likes, he just writes a check for it.

To my way of thinking, that is the only time that a HELOC is better than a HELOAN. they are indeed flexible.

Charles

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