My first comment is that your loan officer is your employee. You are the manager. S/he should explain to you in very simple terms as to what is going on. You are in charge. And finally, when it concerns money, YOUR MONEY, there are no stupid questions.
You will be getting a loan for 36K. You will have to pay the closing costs* and the existing 2nd mortgage off.
You are correct with the teaser rate for 6 months. In an election year there is a very slim chance that prime will go up.
The bank is saying that for their loan, you have to draw that minimum amount at closing. You should ask them how long it has to be drawn out before you can put it back in.
* RE: closing costs. If this is a "No closing cost" loan, then the fine print will say that you have to pay back - a prepayment penalty - that will be about 750.00 This is for the appraisal and title and underwriting that they did not have you pay upfront. Typically this is for a 3 year time period.
Lastly, please do come here when you have other questions. It is fun to anwer questions.
Charles
Quote:
Originally Posted by preschool mom  This is REALLY gonna be a stupid question but I'm too embarrassed to ask the loan officer.
I'm applying for a home equity line. I have a first mortgage at $144K and a second mortgage at $24K.
The loan officer called and said that I'm "approved" for $36K so I'll have $12K available.
Are you ready for the stupid question ????
This means that I will no longer have a monthly payment on the 2nd mortgage right, because part of the $36000 went toward paying it off completely and I have access to $12000 ONLY IF I need it.
The rate is prime MINUS 1.26% for six months then converts to prime ( our house on the market so hopefully it'll sell before six months ).
So for instance next month or whenever I use $8500 then my monthly payment (until August) will be calculated at 4.74% since current prime is 6% based on 30 yrs ??????
Another point, I received this offer in the mail from my bank. In the fine print it says "minimum line amount of $10,000 is required with a required initial advance of $5000 or greater".
Does this mean I have to automatically withdraw $5000 ????? My only purpose for the loan is for emergency.
Thanks for any advice. |
