HELOC loans

[Greyd]

I'm a mortgage newb and have some questions. My house has a value of approx 140k. I'm looking to use a loan to make repairs/upgrades to the house.
Assuming I have fully paid off my house, how much of an HELOC loan can I get on it? Does it depend on credit score,etc? Is there a loan that I can get close to the full amount of equity on my house?

Inform me please!

 

[kranky]

I would think you could easily get a HELOC for 80% of the value of your home, which would be $112k.

Keep in mind the difference between a Home Equity Loan (HEL) and a Home Equity Line of Credit (HELOC). A HEL is a loan with a fixed duration and payments like a car loan and typically has a fixed interest rate. A HELOC is more like a credit card. You can borrow any amount up to your limit and your payment varies based on how much you owe, and probably would have a variable interest rate.

 

[Greyd]

Originally posted by: kranky
I would think you could easily get a HELOC for 80% of the value of your home, which would be $112k.

Keep in mind the difference between a Home Equity Loan (HEL) and a Home Equity Line of Credit (HELOC). A HEL is a loan with a fixed duration and payments like a car loan and typically has a fixed interest rate. A HELOC is more like a credit card. You can borrow any amount up to your limit and your payment varies based on how much you owe, and probably would have a variable interest rate.

Thanks for the info! Is it easier to get more money with one loan than the other? Or do both depend on credit score, income,etc?

 

[bctbct]

A HEL would have a lower fixed interest rate, heloc has a variable. If you plan on working on the house over a period of years I would take out heloc as you just write checks to get the money you want when you want it.

A HEL gives you a check for the entire amount up front, you may end up paying more in interest.

 

[kranky]

Originally posted by: Greyd
Is it easier to get more money with one loan than the other? Or do both depend on credit score, income,etc?

The lending criteria and amount you can borrow are probably going to be equal for both types, but as was noted the HEL will probably have a slightly lower interest rate.

 

[alkemyst]

Originally posted by: bctbct
A HEL would have a lower fixed interest rate, heloc has a variable. If you plan on working on the house over a period of years I would take out heloc as you just write checks to get the money you want when you want it.

A HEL gives you a check for the entire amount up front, you may end up paying more in interest.

Many HELOCs have a limited draw period. You can't just keep pulling money out.

The Line of Credit is good when you are not sure your actual needs, but will come to them in a few months. The disadvantage is the rate does change.

The Loan is good when you know exactly how much you need. You get your lifetime rate right up front.

Some states have laws about these so YMMV. Some people are too stupid (not realizing they are securing their house against a loan they have no intention of repaying) and ruin it for the rest.