Anonymous
03/19/2021 09:40
Subject: How did you pay for your renovations? HELOC? LOC? Cash? HEL?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:
Can you even get HELOCs anymore? I looked into one and no one is doing them.
I have noticed this as well. Any ideas why? I find it strange that banks aren't offering HELOCS anymore.
It was explained to me recently that banks freaked out b/c the pandemic and thought another housing market crash was on the way. Because during the 2008 crisis HELOCS and other second mortgages were the first to be defaulted, the big banks stopped offering this product.
Some are offering them again, but they mostly require you to have your primary mortgage with them. So if you’re first mortgage is with a lender that doesn’t offer HELOCS, you would have to refi with a new lender who does offer them. But if you’re like me and you refi’d recently for a sub 3% mortgage, then it’s impossible to change lenders without getting a higher rate and by law they won’t even do that anyway because they’re not allowed to do a refi that doesn’t offer a certain amount of benefit to the borrower.
Bottom line, there are credit unions that offer standalone HELOCS assuming you have decent credit. Shop around at those. Don’t bother with the big banks unless you already have a first mortgage with them.
Yea, this, they are impossible to get. I was reading in a finance article that there were 26 HELOCS granted in 2020 in the whole country. Right now they are unicorns.
That statistic sounds fake...
Anonymous
03/19/2021 09:21
Subject: How did you pay for your renovations? HELOC? LOC? Cash? HEL?
Anonymous wrote:Cash
Cash plus we refinanced from a 20 to a 15-year mortgage and we were able to take $ out while not having to pay the bank a cent more.
Anonymous
03/19/2021 09:11
Subject: How did you pay for your renovations? HELOC? LOC? Cash? HEL?
Anonymous wrote:Anonymous wrote:Anonymous wrote:
Can you even get HELOCs anymore? I looked into one and no one is doing them.
I have noticed this as well. Any ideas why? I find it strange that banks aren't offering HELOCS anymore.
It was explained to me recently that banks freaked out b/c the pandemic and thought another housing market crash was on the way. Because during the 2008 crisis HELOCS and other second mortgages were the first to be defaulted, the big banks stopped offering this product.
Some are offering them again, but they mostly require you to have your primary mortgage with them. So if you’re first mortgage is with a lender that doesn’t offer HELOCS, you would have to refi with a new lender who does offer them. But if you’re like me and you refi’d recently for a sub 3% mortgage, then it’s impossible to change lenders without getting a higher rate and by law they won’t even do that anyway because they’re not allowed to do a refi that doesn’t offer a certain amount of benefit to the borrower.
Bottom line, there are credit unions that offer standalone HELOCS assuming you have decent credit. Shop around at those. Don’t bother with the big banks unless you already have a first mortgage with them.
Yea, this, they are impossible to get. I was reading in a finance article that there were 26 HELOCS granted in 2020 in the whole country. Right now they are unicorns.
Anonymous
03/18/2021 16:08
Subject: How did you pay for your renovations? HELOC? LOC? Cash? HEL?
Anonymous wrote:Anonymous wrote:
Can you even get HELOCs anymore? I looked into one and no one is doing them.
I have noticed this as well. Any ideas why? I find it strange that banks aren't offering HELOCS anymore.
It was explained to me recently that banks freaked out b/c the pandemic and thought another housing market crash was on the way. Because during the 2008 crisis HELOCS and other second mortgages were the first to be defaulted, the big banks stopped offering this product.
Some are offering them again, but they mostly require you to have your primary mortgage with them. So if you’re first mortgage is with a lender that doesn’t offer HELOCS, you would have to refi with a new lender who does offer them. But if you’re like me and you refi’d recently for a sub 3% mortgage, then it’s impossible to change lenders without getting a higher rate and by law they won’t even do that anyway because they’re not allowed to do a refi that doesn’t offer a certain amount of benefit to the borrower.
Bottom line, there are credit unions that offer standalone HELOCS assuming you have decent credit. Shop around at those. Don’t bother with the big banks unless you already have a first mortgage with them.
Anonymous
03/18/2021 15:41
Subject: How did you pay for your renovations? HELOC? LOC? Cash? HEL?
Anonymous wrote:
Can you even get HELOCs anymore? I looked into one and no one is doing them.
I have noticed this as well. Any ideas why? I find it strange that banks aren't offering HELOCS anymore.
Anonymous
03/18/2021 14:26
Subject: How did you pay for your renovations? HELOC? LOC? Cash? HEL?
Can someone explain the differences of HEL, HELOC and home equity loans to me? I understand that you have to sign on a HELOC that you plan to stay in the house for some period (we are doing upgrades to sell), but I thought they were all one and the same. TIA
Anonymous
03/18/2021 14:19
Subject: How did you pay for your renovations? HELOC? LOC? Cash? HEL?
Can you even get HELOCs anymore? I looked into one and no one is doing them.
Anonymous
03/18/2021 11:35
Subject: How did you pay for your renovations? HELOC? LOC? Cash? HEL?
Anonymous wrote:OP here. Thank you everyone. I didn't realize you could deduct interest on a HEL.
Make sure you keep records of the renovation in case you get audited.
Anonymous
03/18/2021 10:50
Subject: How did you pay for your renovations? HELOC? LOC? Cash? HEL?
We did a cash out refinance for a kitchen, bathroom and significant landscaping. Took out a 15 year loan (we’ve already owned the house for 17 years). Rates are still really low.
Anonymous
03/18/2021 10:47
Subject: How did you pay for your renovations? HELOC? LOC? Cash? HEL?
OP here. Thank you everyone. I didn't realize you could deduct interest on a HEL.
Anonymous
03/18/2021 08:01
Subject: How did you pay for your renovations? HELOC? LOC? Cash? HEL?
We used some cash and got a 10 year low interest HEL.
Anonymous
03/18/2021 00:05
Subject: How did you pay for your renovations? HELOC? LOC? Cash? HEL?
We paid cash for out $600,000 reno and it was the biggest mistake.
I wish we had gotten a loan because when the contractor didn't do the work - the bank wouldn't have paid him. He was always pressuring me to pay for thing he said were 80% done but were more like 25% done. It's a lot of arguing and they eventually put one over on you.
Also the bank will get lien waivers which you absolutely have to have from every contractor and sub but GCs really don't want to give them or they fake them.
Banks don't really substitute for inspectors but it's better than nothing and they won't pay GC if you have concerns
I wish we had gotten a loan because when the contractor didn't do the work - the bank wouldn't have paid him. He was always pressuring me to pay for thing he said were 80% done but were more like 25% done. It's a lot of arguing and they eventually put one over on you.
Also the bank will get lien waivers which you absolutely have to have from every contractor and sub but GCs really don't want to give them or they fake them.
Banks don't really substitute for inspectors but it's better than nothing and they won't pay GC if you have concerns
Anonymous
03/17/2021 08:59
Subject: How did you pay for your renovations? HELOC? LOC? Cash? HEL?
Cash when we did the kitchen and bathrooms; cash out refinance for whole lower level renovation; heloc for large addition plus hardscaping; cash for landscaping.
Forever home we've lived in since we married, and it was worth more than double what we paid when we started the renovation process, and through all of this our mortgage went down each time due to dropping rates.
Forever home we've lived in since we married, and it was worth more than double what we paid when we started the renovation process, and through all of this our mortgage went down each time due to dropping rates.
Anonymous
03/17/2021 08:50
Subject: Re:How did you pay for your renovations? HELOC? LOC? Cash? HEL?
Cash. We also pay as you go. As a result, the renovations happen over time.
Anonymous
03/17/2021 08:11
Subject: Re:How did you pay for your renovations? HELOC? LOC? Cash? HEL?
We could save for a couple of years and pay cash or use a HEL or HELOC. HELOC seems like the way to go since you can write a check out of it as needed. With a HEL you have to know the exact amount you're going to need up front to make the entire thing tax deductible (these loans are still deductible but only if used for home renovation and not paying off debt and other things).
https://www.irs.gov/newsroom/interest-on-home-equity-loans-often-still-deductible-under-new-law
Example 1: In January 2018, a taxpayer takes out a $500,000 mortgage to purchase a main home with a fair market value of $800,000. In February 2018, the taxpayer takes out a $250,000 home equity loan to put an addition on the main home. Both loans are secured by the main home and the total does not exceed the cost of the home. Because the total amount of both loans does not exceed $750,000, all of the interest paid on the loans is deductible. However, if the taxpayer used the home equity loan proceeds for personal expenses, such as paying off student loans and credit cards, then the interest on the home equity loan would not be deductible.
https://www.irs.gov/newsroom/interest-on-home-equity-loans-often-still-deductible-under-new-law
Example 1: In January 2018, a taxpayer takes out a $500,000 mortgage to purchase a main home with a fair market value of $800,000. In February 2018, the taxpayer takes out a $250,000 home equity loan to put an addition on the main home. Both loans are secured by the main home and the total does not exceed the cost of the home. Because the total amount of both loans does not exceed $750,000, all of the interest paid on the loans is deductible. However, if the taxpayer used the home equity loan proceeds for personal expenses, such as paying off student loans and credit cards, then the interest on the home equity loan would not be deductible.