The Official Homeowners Thread

[LEEeveryday]

Can someone explain Home Equity Line of credit?

How soon can I apply for that?
What are the qualifications?
Do I have to pay this back? Does the payment get applied to the mortgage or is it like having another credit card bill?

 

[Rawtid]

Can someone explain Home Equity Line of credit?

How soon can I apply for that?
What are the qualifications?
Do I have to pay this back? Does the payment get applied to the mortgage or is it like having another credit card bill?

HELOC is like a credit card (revolving debt) and it has a variable interest rate usually at prime + whatever rate they give you. It typically has 2 phases, "draw" and "repayment". During the "draw" period, you will be required to make interest only payments based on the amount drawn. Now remember, because this is a variable loan, the more you take out, the more your payments will be because it's based on the average daily balance. The draw period can last anywhere from 5-20 years. During the repayment period your loan will be fully amortized, meaning you will have to make principal and interest payments on the amount due (typically higher than interest only payments). Also note that some lenders don't have a repayment period, so the full balance will be due at the end of the draw period. I summarized what I already knew and info from this site Home Equity Line of Credit - HELOC | The Truth About Mortgage.com

HELOC advantages:

– lower rate than a fixed loan
– interest-only option
– no prepay
– ability to choose draw you want, when you want
– lower fees

HELOC disadvantages:

– adjustable rate
– no periodic caps on interest rate
– early closure fee
– minimum draw amounts

 

[Rawtid]

Range of what credit should look like? I low key fukked mines in college. I need these 2 years to build up and idk if a bank would be willing to work with me.

At least 620

 

[intruder]

Welcoming @Rawtid to the brotherhood!

Congrats babe!

Note when I crash over:

1. I don't sleep on couches
2. I require a female spooning partner

 

[thaKEAF]

Brehs is there a way to add extra money than what the house value is to your mortgage in order to do renovations? I was reading about the 203k Rehab but I'm not sure if this is the same thing that I'm thinking.

 

[Stir Fry]

I like to fancy myself as somewhat of a manly type of guy when it comes to diy type shyt. Maybe some folks can gain from some of the stuff that I've learned over the years of homeownership/working trade jobs. I'm looking to take out some money for a remodel so I'll probably be bugging some of you on advice on the best way of going about getting some money towards it in return.

Don't be afraid to familiarize yourself with your house's crawlspace. I work under houses semi often, and even though they might be wet, dirty, or even be infested with rat droppings, just put some old clothes on, sack up and work through it. You'll realize that it really isn't that bad once you do it once or twice. It's great for running wires between rooms and troubleshooting gas/water issues.

Mandatory tools that every homeowner should have, imo. With this toolset and a few other minor such as an allen wrench set, caulk gun, and good assortment of washers and screws of various lengths, there really shouldn't be anything around the house that you couldn't repair or remodel yourself. I'm a fan of DeWalt tools personally.

Spoiler

18V drill / sawzall combo. This particular drill has a rotary hammer option which is mandatory if you have a stucco house.

Mitre Saw (A table saw is good too, but I wouldn't really consider it mandatory)

Speed Square and a heavy duty 25' tape measurer

20oz Estwing FRAMING hammer (Don't get the "claw" version, which has the more aggressively curved tail)

Palm Sander

Stanley Classic Utility knife (these can be hammered on)

General purpose drill bit set

Five-In-One Painter's tool

1" wide chisel

Center punch (for recessing nails)

Wet/Dry Shop vac

A large pair of channel locks and crescent wrenches in various sizes

Here's some before and afters of my house. I always hire friends with some background knowledge of whatever project I'm working on, but try to do a lionshare of the work. Kind of like a student/teacher relationship.



With gardens, remember that plants need more than just water to grow. They also need nutrients, and water washes out soil after so many times.

These irrigation timers are only ~$20

 

[Rawtid]

Brehs is there a way to add extra money than what the house value is to your mortgage in order to do renovations? I was reading about the 203k Rehab but I'm not sure if this is the same thing that I'm thinking.

So you already own the home and you want to renovate?

 

[Stir Fry]

So you already own the home and you want to renovate?

I'm interested in this as well. Never taken money out against a house to work on it but we're thinking about doing some fairly costly work, so it looks like we'll be having to borrow against it.

 

[Rawtid]

I'm interested in this as well. Never taken money out against a house to work on it but we're thinking about doing some fairly costly work, so it looks like we'll be having to borrow against it.

Yeah normally you use a HELOC or HEL. You can refinance and get a 203k loan. Do you have a decent limit on your credit card? If so cash flow what you can and then get a cash advance. Normally they are 0% for at least a year. A lot of materials you can get inexpensively, the labor is the a$$hole of costs.

I like the idea of using a credit card better because it's not tied to your home so if you cant pay your house is still safe. The other options not so much.

 

[thaKEAF]

So you already own the home and you want to renovate?

I'm about to buy my grandparents house but I want to make some renovations after I get it. Stuff like adding a better fence and I want to completely redo the bathroom and kitchen.

 

[Stir Fry]

Yeah normally you use a HELOC or HEL. You can refinance and get a 203k loan. Do you have a decent limit on your credit card? If so cash flow what you can and then get a cash advance. Normally they are 0% for at least a year. A lot of materials you can get inexpensively, the labor is the a$$hole of costs.

I like the idea of using a credit card better because it's not tied to your home so if you cant pay your house is still safe. The other options not so much.

We're thinking of some reno's that will probably be in the $100-200k range, so doing this on our own won't be possible. We have tons of equity, and it's a long term investment. We don't plan on selling this house.

 

[Rawtid]

I'm about to buy my grandparents house but I want to make some renovations after I get it. Stuff like adding a better fence and I want to completely redo the bathroom and kitchen.

Ok so you are getting a mortgage? If so then yes you can do a 203k loan which allows you to put the mortgage and home renovations into one loan.

 

[Rawtid]

We're thinking of some reno's that will probably be in the $100-200k range, so doing this on our own won't be possible. We have tons of equity, and it's a long term investment. We don't plan on selling this house.

Whew!!! Y'all redoing the whole damn house!! Im excited for you lol take pictures!!

 

[thaKEAF]

Ok so you are getting a mortgage? If so then yes you can do a 203k loan which allows you to put the mortgage and home renovations into one loan.

Thanks..so that amount is just added to the principle?

 

[Rawtid]

Thanks..so that amount is just added to the principle?

From what I'm reading it's a separate payment but you can do an FHA mortgage and 203k all at the same time. Normally it's two different transactions. Here is a site I found that is helpful. Top 20 Questions Buyers and Owners Ask About FHA 203K

Edit: actually I lied it does look like it's one loan.