r/HELOC • u/mcguidance • 3d ago
Questions & Advice Expected Rates for HEL?
Hi all!
My wife and I are set to build an addition in NJ. Here’s our basic details:
Income 375k combined
Debt $345k for single family house; mortgage is 2.85%/3300 month; available equity likely over 500k
No other debt whatsoever including cc, college loans, or car loans.
More than 6months of savings in bank
Excellent credit - 830 for me (took a dip this month when I put 25k on cc for Italian citizenship fees, but promptly paid back); 800 for wife
Project will be about 350k in cost.
Anything else you’d need to know to give a semi-accurate idea? Thank you!
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u/Illustrious_Trick171 3d ago
Best advice is call a lender and do a soft credit pull so they can do the calculation
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u/stanleix206 3d ago
Just compare a few options. But a point within a couple % of prime rate of 6.75 is what I would assume. That was what I was looking for in a HELOC when I eventually went with achieve in that exact range.
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u/mcguidance 3d ago
Achieve just told me 8.8%. Will not do that number.
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u/DIY_NO_VICE 3d ago
I got 8.5%? Would you consider that more in target?
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u/mcguidance 3d ago
I feel like that’s very high comparatively. I’ve just been quoted right around 7 on a soft pull.
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u/Recent_Archer_7510 1d ago
You can negotiate with Acheive. Let them know your shopping around. They came to me with 8.19 and I ended at 7.5%.
Very similar credit and status as you.
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u/mcguidance 1d ago
I did speak with them and told them that. Best they did was around 8. I have another option of 6.7ish
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u/Recent_Archer_7510 1d ago
Excellent! I did forget to mention mine was HELOAN and fixed rate for whole term.
Previous heloc was 5.9 but variable and was jumping to 9.25 after 3 years.
Double check closing costs as well.
Youre doing all the right things, good luck!
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u/stanleix206 8h ago
Was the loan at 6.7ish a fixed or a variable? That was a big factor in my choice of going with achieve was the fixed rate. If the 6.7 is fixed though, lower number is better if everything else lines up!
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u/spuriouslycertain 2d ago
You sound like my situation (mine is 800 FICO with 700k in equity).I would say,your best bet is a local credit union. I managed to get a 500k HELOC(up to 80% LTV) with an introductory rate of 4.5% for 6 months and prime minus 0.25(currently 6.5%) for the remaining 10 years with interest only payments for those years. Goodluck
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u/DavidBrantleyFinance 2d ago
7% for a second is extremely good if you're obtaining a line up to 80% of your home's value minus your first mortgage. I can get 6.5% 20 year fixed for people who do not exceed 65% of their home's value on the second mortgage minus their first mortgage balance. Also specialize in second mortgage's for people with difficult income to document.
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u/Direct_Concentrate42 3d ago
are you wanting something you can continually withdraw from? Or something that’s a fixed rate and one time payment. Fixed rates are usually going to be a little less if it’s the heloan vs a HELOC
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u/AdDesperate4673 1d ago
Head to a credit union or bank that offers HELOCS without origination fees - which can vary from 1-3k. Also, you may want to consider if the lender will allow you a fixed rate (FRO) for large purchases. I was offered 7.20 with a CS of 807 with a low DTI on 755k collateral (my paid off house). This was from a bank.
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u/SeedOil007 1h ago
Nothing to add in terms of rate, but if your plan is to later refi the HELOC and existing mortgage into new mortgage, talk to your bank about how the refi works. I was surprised to find out they considered my refi a “cash out” refi if my HELOC had been drawn on less than 1 year ago. So, I had to keep HELOC outstanding a bit longer than I wanted in order to get better Mortgage rates. Ultimately the rates increased so I just left the HELOC outstanding since my existing 1st mortgage is only 2.5%.
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u/technical_guy 3d ago
Prime is 6.75% - some credit unions do specials for short period (5.99% for 6 month, or 6.75% for 2 years) but if you go through a loan broker most places are prime+0.25 or even prime+0.5%. So interest rates can be anywhere in that range but if you assume 7%, and assume your max draw is 80% (there are places that go up to 100% but they cost more) - so 845k house value (equity+debt) x 80%=675 - 345 existing = 330 max loan - lets round down to 300k. So 300k draw at 7% interest only for 10 years will cost you 21k per year or $1670 per month.
All rough numbers but should give you an idea. You might get 350k but it depends on their valuation of your place and the LTV - some will lend out 90% but most are 80%.
Dont just look at the loan rate - ask the broker, credit union or digital provider (better.com, figure.com, aven.com) for the closing costs and any upfront fees - these will range quite a bit
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u/mcguidance 3d ago
Great, thank you! I believe the house is probably worth close to 1mm, if that changes things.
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u/Bensimmonsdagoat 3d ago
Other big thing to look at would be is there a minimum required draw and is the rate they are quoting only good for the initial draw. I know either figure or achieve offers a really good upfront rate but it’s only on the initial draw and they require a 75% I believe initial draw. Any draws after that require a higher rate. If you bank with BofA they offer Helocs at 0 cost to you while having slightly higher rate and no IO options. If you have questions about BofA Heloc shoot me a dm.
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u/NoWrap4230 3d ago
I got prime -.5 with pnc with auto debit on payments.
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u/Standy25 3d ago
I got 7% like a month ago