Home equity line of credit

Do you have to pay closing costs on a home equity line of credit? I am clueless when it comes to this stuff. We are planning on redoing a major part of the main part of our house.

Re: Home equity line of credit

I believe it is only $100 at most places if that.

Re: Home equity line of credit

It depends on the lender. We are taking out a home equity loan and there are no closing costs. We are taking out the loan with our credit union who holds the mortgage on the house. I think each bank/lender varies. You could check out different banks online - start with who ever holds the mortgage on your house.

Re: Home equity line of credit

Thanks for the info.

Re: Home equity line of credit

You're welcome :)

Re: Home equity line of credit

we took one out and didn't pay closing costs. I'm glad we did it!

Re: Home equity line of credit

Really? I thought you had to pay mortgage tax? Actually I am pretty sure you do, at least we did anyway.

Edited: Maybe it is because we took out a HELOC in full?

Re: Home equity line of credit

A mortgage tax on a home equity line of credit????

I'm confused.

And could someone explain to me how this equity line of credit works??

Is this right:

You get X amount of dollars, against the equity in the house .. then you have a monthly payment (like a credit card, only with a better interest rate)???

In general .. what is the length .. is it 30 years like a mortgage??

I feel so stupid!

Re: Home equity line of credit

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Posted by Kel

A mortgage tax on a home equity line of credit????

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Mortgage tax is paid on all recorded mortgages. The county will not record the mortgage unless the correct tax amount accompanies the document. In Nassau and Suffolk it is 1% of the loan amount. The bank typically pays 1/4 of the 1% (called the 'quarter point'). In the boroughs the mortgage tax is 2%, the bank still pays a 1/4 of 1%. (However, Federal instituations are exempt from paying the 1/4 point.)

On a credit line mortgage you pay the mortgage tax on the entire line of credit, even if you never use the whole thing (because it's pre-paid).

Re: Home equity line of credit

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Posted by Kel

A mortgage tax on a home equity line of credit????

I'm confused.

And could someone explain to me how this equity line of credit works??

Is this right:

You get X amount of dollars, against the equity in the house .. then you have a monthly payment (like a credit card, only with a better interest rate)???

In general .. what is the length .. is it 30 years like a mortgage??

I feel so stupid!

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Don't feel stupid because I was thinking the same question!!!

Re: Home equity line of credit

a HELOC (what we have) is best explained as a high limit credit card. You can either have the interest fixed or adjustable. YOu choose how much you want your limit to be and if approved, you can withdraw on that money using a 'check book' for anything you want. The reason it is like a credit card is that you only pay interest on what you have spent.

for example, my DH and I just took a HELOC for $50k. We decided to pay off credit cards and do some work around the house- which we figure we will be using only $20k of it. so, what ever we use we will be paying interest on. If we never touch teh rest of te 50k, we dont pay interest on it.

we took out more on the line of credit for emergency purposes since you just have to write a check and the money;s there- since we dont pay interest until we use it.

Re: Home equity line of credit

It depends on the bank. Sometimes banks promote 'no closing cost' heloc's - but there are certain things that must be paid when you take out a mortgage - recording fee to record your mortgage and mortgage tax - they both get paid to the county. A lot of times you don't get title insurance on a heloc because you already had it on your first mortgage and the bank will not require it. Let me know if you have any more questions

Re: Home equity line of credit

no closing costs at citibank as long as you dont pay off the line in 3 years.