Alvin wrote:

- quote -

How about if I leave with "the fine details of the contract are
different, but your house is still on the line"?

"JoeTaxpayer" <JoeTaxpayer[at]comcast.net> wrote in message
news:gomb1a$e5o$1[at]news.motzarella.org...
- quote -

So the home isn't collateral? Honest question, I don't know but I assume it
would be.
If the home is collateral, none payment would have similar consequences
would they not?

On Wed, 4 Mar 2009 10:46:19 -0600, JoeTaxpayer
<JoeTaxpayer[at]comcast.net> wrote:

- quote -

Your home is still the collateral. It IS essentially a mortgage.
Thumper

Alvin wrote:

- quote -

It is you. The terms are different. A HELOC that the OP has is a
variable loan, which is tied to an index (usually Prime Rate) and can
adjust monthly. It has a draw period, usually 10 years, then must be
paid over the next 20, still variable.

If you mean the amount owed feels like a mortgage, well, of course. But
the consequences are very different.

Joe

"Andrew Koenig" <ark[at]acm.org> wrote in message
news:c2xrl.46236$4m1.33314[at]bgtnsc05-news.ops.worldnet.att.net...
- quote -

Maybe it's just me but I think $200,000 in a home equity loan is a mortgage.

"JoeTaxpayer" <JoeTaxpayer[at]comcast.net> wrote in message
news:gokag5$amf$1[at]news.motzarella.org...

- quote -

Hey, it happens. Consider the following scenario:

You buy a house and take out a mortgage.

A few years later, interest rates have decreased slightly, property values
have gone up, and you want to enlarge the house. So you take out an HELOC
at a rate slightly less than the mortgage and add onto the house. Now you
get a cash windfall and decide to use it to pay off as much debt as you can.
Of course you pay the debt with the higher interest rate first.

Presto: HELOC with no mortgage.

deutliu[at]gmail.com wrote:
- quote -

Am I reading this correctly? You owe $200K on the HELOC, but have no
first mortgage?

It's tempting to have such a low rate (my HELOC is now 2.5%, vs first at
5.24%) but the HELOC has no place to go but up. Mine can go above the
first in under a year if the 2001 run up is repeated. I've kept the
HELOC balance at a level that I am confident I can pay off in full in
less than a year.
Yes, I'd recommend getting a new fixed first.
No, you cannot keep the HELOC as the fixed mortgage will need a first
lien. Nothing to do with 80%, it has to do with position.
The first mortgage guy may give you a HELOC at the same time. Mine did,
and each time I refinanced the first, they went through the motion of
canceling and re-issuing the HELOC, even though both loans were theirs.

Joe

On Tue, 3 Mar 2009 04:02:31 -0600, deutliu[at]gmail.com wrote:

- quote -

You don't own the house outright if you have a Home equity Line of
Credit.
Thumper

In article
<96193843-82b1-461c-9f45-13efb94a9f27[at]k9g2000prh.googlegroups.com> ,
deutliu[at]gmail.com wrote:

- quote -

Yes, it is good to refi a variable H/E loan into a fixed H/E loan
or conventional 2nd mortgage. You could also try to refi both
the first and 2nd into one new first. The lender will likely
have you close the old H/E as part of the process of getting
a new H/E loan. They may do this by writing a check for the
loan balance directly to the old H/E servicing company. You
may find it hard to get any new loans if you loan to value
is over 80%, especially if the lender asks for a new appraisal,
and that value comes in rather conservatively.

A variable rate H/E loan isn't the worst thing you could have
right now. My H/E loan adjusted down to $3.125%, and will
probably stay under the rate of my fixed first mortgage for
quite some time into the future.

-john-

--
================================================== ====================
John A. Weeks III * * * * * 612-720-2854 * * * * * *john[at]johnweeks.com
Newave Communications * * * * * * * * * * * * http://www.johnweeks.com
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Hi,

I have $200K balance on my home equity line of credit of my primary
residence. I own the house outright and the current market value for
the house is about $400K. Is it a right approach to refinace the HELOC
into a 30-year mortgage to take advantage of the low fixed interest
rate. I'm also wondering if I can still keep the HELOC after I
refinance. Will the lender require me to close the heloc account first
so that the loan-to-value ratio is under 80%?

Thanks,
Ian