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.