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A new Home Equity Loan Product (a loan – not a line of credit)
February 16th, 2010 categories: Real Estate News
Lenders like making money from your equity and here's a way that could help you finance that special project.
Different lenders offer different products, many of them also offer the same products and it is very important to compare apples to apples when shopping for a mortgage. I think the new Good Faith Estimate helps to do just that. If you are only considering a 30 year mortgage and not researching different offerings and how they might best fit with your future plans, you may be doing yourself a disservice.
If you already have a home and are considering a big purchase–a car, boat, down payment on a vacation property, college, etc, you might want to know about this new offering from Third Federal who offers both equity lines, which can vary monthly based on principal balance, and equity loans which are fixed monthly payments over a particular period of time.
Starting tomorrow, February 17th, they have a new equity loan called “Prime Plus.” The rate will be prime plus .74% (currently that would be 3.99%) but it will be fixed for the first 3 years. After that it will work like a regular 3/1 ARM in that it will change yearly, and the rate cannot go up or down more than 2% per change or 6% over the life of the loan. Minimum loan amount is $10,000 and you get to choose the term.
Example: you want to buy a car for $20,000. If you choose repayment over 10 years, the payment is $202.40 (for 1st 3 years) and if you choose repayment over 30 years (that is the maximum) your payment for the 1st 3 years is $95.37.
