The Too-Good-to-Be-True Home Equity Loan
When is a home equity line of credit (“HELOC”) — offered at a 2.99%, six month teaser rate — too good to be true?
When, four months after the would-be Borrower first applied for the loan, the very big (and very overwhelmed) national lender still hasn’t approved it.
Ticking Clock
Usually, HELOC’s aren’t time-sensitive, because the borrower already owns the home.
However, in this case, the Borrower needed the funds for the downpayment on their upcoming home purchase.*
With the closing less than one week away and the HELOC still not approved, the Buyer called Edina Mortgage’s Steve Mohabir.
Steve immediately found another lender — Prime Security Bank in Shakopee — who approved an expedited HELOC, which the Buyer promptly tapped for their downpayment, and proceeded to close on time.
Elapsed time from loan application to release of funds: 5 business days.
Way to go, Steve!
*The Buyer chose to buy their new home first, then sell their current home — what Realtors call “buying non-contingent.”
Sellers overwhelmingly prefer that — some won’t even consider selling Contingent — but that can mean the Buyer needs to access the equity in their current home.
Bridge loans used to be one way to do that; now, apparently, HELOC’s are the only game in town.