<p>Does anyone have any good suggestions on a bank to use for a HELOC?</p>
<p>I’m interested in getting a nice signup bonus if any such banks are offering them. Not planning on using it, so I’m not very concerned about rates. I just think it’s nice to have money handy should the need arise.</p>
<p>I agree(d) with you. It cost me nothing and I figured it is easy to get when you don’t need it but hard or impossible to get when you do need it. I thought of it as a free insurance policy and of course my bank was very eager to sign me up. Then we unexpectedly sold our house and moved a year later(or two? I can’t remember) and had to pay a $600 fee at closing for cancelling the HELOC. It was annoying.</p>
<p>We got our HELOC at the bank which held our mortgage. They offered one with NO closing fees, NO annual fee, no application fee, no need to use it and the HELOC was good for 10 years. We got no signing bonus but were happy that there were absolutely NO expenses with applying for getting and so far never using the HELOC. There is some peace of mind knowing that if we suddenly needed money, we could readily draw on the HELOC for up to 6 figures.</p>
<p>Our criteria for the HELOC was finding a place that had absolutely NO fees or expenses at all associated with the application nor any annual fees for not drawing on the HELOC. No regrets so far. Schwab said they had a HELOC, but I had already gotten one with the bank and there is a charge if we cancel it before some length of time so we haven’t bothered looking into the details of HELOC Schwab offered.</p>
<p>I’d start by checking out the HELOCs where you already do some banking–many are pretty competitive with the terms others are offering.</p>
<p>I’ve had good luck with HELOCs at credit unions. They often have lower fees and better rates than banks.</p>
<p>If you go where your mortgage is, you may be able to avoid paperwork like an appraisal as well. The same may be true if you go to a local bank or credit union: they know the local market conditions and values.</p>
<p>Around HI, many of the local financial institutions won’t require an appraisal for real property if your HELOC is below a certain amount (like $250K), because real estate values are so high in HI.</p>
<p>I had great luck with Hanscom Federal Credit Union (hfcu). I did have to “donate” $25 to a wildlife/watershed fund. Really easy process; sort of the opposite of OP, I was looking for lowest possible interest rates.</p>
<p>It seems safer to have an emergency fund - preferably one that is earning interest rather than counting on a loan for emergencies.</p>
<p>HELOC pricing and fees tend to be very market specific. Factors typcially include the number of “nationwide mega banks” in your area as well as the appetite of community banks and credit unions in your area for HELOCs. The general economy within the market also influences the underwriting. You will need to check the banks and credit unions in your area for the best deal(s) available.</p>
<p>A couple years ago, certain mega banks would refuse to write HELOCs on condos, townhomes etc. in certain markets and imposed more severe advance rates in other markets - due to taking huge writeoffs after the crash. I believe things have improved, but I haven’t done any specific research.</p>
<p>If banks offer “no closing cost” loans, they almost always have a clause requiring a termination fee if the line is closed within 2-3 years. That seems fair since the appraiser, title company, loan officer, credit bureau don’t work for free - the bank needs an opportunity to “earn back” those hard costs through annual fees and/or interest.</p>
<p>For the certain people, HELOCs can be an “emergency fund”. I would include in this group those who have investments in securities that can be sold if needed to payoff or reduce the debt. However, such sales involve tax and market timing issues that can often making borrowing the funds from a tax deductible, low cost credit line a more advantageous method of meeting an “emergency”.</p>
<p>My HELOC is with State Farm Bank. There were no fees or closing costs. Check with a local State Farm Insurance agent.</p>
<p>We use BECU which is in your area.</p>
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<p>I’ve discussed this before, but a home equity line of credit is an outstanding emergency fund, but I wouldn’t advise anyone to have it as the only emergency funds available.</p>
<p>I don’t keep 6 months living expenses cash in my local checking account because the interest payments is about zero. I keep it in various different vehicles that can be accessed although they are slightly less liquid. Examples are: stocks, mutual funds, and US savings bonds. This money requires 5-10 days to access, while a home equity line of credit can be accessed virtually immediately.</p>
<p>The “best” HELOC product will also depend upon your anticipated usage. </p>
<p>Are you planning to use the HELOC right away (remodeling the kitchen), in the near future (buy a new car next year) or is it truly for emergencies? If you will definitely use the line, you should be more concerned about the interest rate, draw period and amortization after the draw period than a small difference in annual fees. If the line is only for emergencies, no closing costs and low annual fees are more of a priority. What I’ve seen is the that the interest rates and annual fees are the items that are advertised, but the draw period and amortization period (if any) are rarely mentioned - but these items can be more important and should be carefully evaluated if you are planning to use the line.</p>
<p>One final observation about HELOCs being an emergency fund - as pointed out by engineer - they are are a good liquidity tool, not a substitute for savings. The recession proved that if real estate market values drop enough or if you are laid-off, the terms of the loan allow the bank to freeze the line. The actual practice of freeezing lines varied by bank, but under the terms or virtually every HELOC, it is allowed if the bank has reason to believe your financial situation has changed.</p>
<p>I would go with whom ever holds your first mortgage. I can tell you that having a HELOC at a second bank is a PITA if you are trying to refinance…</p>
<p>I get the reasoning for why some want a home equity line of credit, but I’ve never had to wait 5-10 days to access savings bonds.
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