Question about HELOCs - Posted by Andrew

Posted by Jimmy on September 17, 2004 at 09:30:47:

I can only tell you how mine works. There is no grace period. if you use the line, you incur interest. period. no exceptions. but two weeks worth of interest is a small number. On my HELOC, the interest charge for a $20,000 draw paid back in 2 weeks would be $41.66.

MY HELOC is with Wells Fargo. there were no points to set it up, and no points, fees, or other charges when I use the line.

the only hidden gotcha (and it was not really hidden, I just did not think it through very well) was this:

Wells Fargo requires me to maintain insurance on my home (no surprise!). My policy was based on the original purchase price. By the time I took out the HELOC, the house had appreciated considerably. After I drew down the line to buy a coupe of properties, I got a letter from WFB requiring me to up my insurance coverage. Not all the way to current FMV. But high enough to cover the two loan balances (my primary mortgage and my HELOC)

I did not appreciate the little surprise, but it makes perfect sense. and it was disclosed in my loan docs.

a cost of doing business.

Question about HELOCs - Posted by Andrew

Posted by Andrew on September 16, 2004 at 18:56:22:

Do Home equity lines of credit work just like credit cards? In that, i mean do you have a grace period to pay the money back so you dont add up interest or does interest start from day 1? Also is there generally any thing to pay to use the heloc like points or anything?
I guess basically what im asking is if i had a 100k HELOC and i used say 20k of it to buy something and paid it back in 2 weeks would i be paying back 20k or would it be like $20,300 or something?