Any HELOC tips?

[disneysteve]

Last fall, we took out a Parent PLUS loan for college. I realized later that it really wasn't a great idea. It would have been far better to do a HELOC, so my plan for the coming school year is to do just that. I want to open a HELOC, draw out what we need to pay off the PLUS loan (about $7,500 at the moment) as well as what we need for the fall semester (also around that same amount - $7, 500). We'll avoid the 4+% origination fee and the interest rate will be a couple of points lower and tax deductible.

I searched at Bankrate.com to find a place with no required draw and a good rate. Anything else I need to be watching out for?

[Jluke]

the interest rate will be a couple of points lower and tax deductible.

Anything else I need to be watching out for?

I've lost track of the tax reform initiative, but I think that would be one thing to look out for. would the interest really be deductible if the Standard Deduction is raised?

[disneysteve]

would the interest really be deductible if the Standard Deduction is raised?

I have no idea. I was basing that comment on current tax law. But ultimately, I don't care if it is or isn't. Just getting a rate that is 2-3% lower than the PLUS would be sufficient savings. If it turns out to be deductible, even better.

[disneysteve]

I just applied for the HELOC. Current rate is 3.99% though I realize that will likely go up soon as the Fed raises rates. It should close in plenty of time to draw on it for fall tuition in August.

[bjl584]

I have one through a smaller regional bank.

I had to have an appraisal done, but that was it. HELOC's are one of the easier credit tools to open. They are pretty straight forward.

[disneysteve]

HELOC's are one of the easier credit tools to open. They are pretty straight forward.

I'm hoping the process is quick and easy. The application was simple enough. We don't have a complicated situation, our only debt is a small mortgage and a very small student loan, we have lots of equity, and we have a ton of assets relative to the amount we're looking to borrow. Plus we both have credit scores between 830 and 850. I don't think we should have any trouble getting approved.

[Singuy]

Did you have to pay a closing cost? The HELCO I've taken out with Suntrust didn't have a closing cost as long as it's open for at least 3 years.

[disneysteve]

Did you have to pay a closing cost? The HELCO I've taken out with Suntrust didn't have a closing cost as long as it's open for at least 3 years.

Nope. No fees at all to open the line. There is a $65 annual account fee but it is waived the first year.

[evgeniusleo]

I just applied for the HELOC. Current rate is 3.99% though I realize that will likely go up soon as the Fed raises rates. It should close in plenty of time to draw on it for fall tuition in August.

I envy you!
A very small percentage.
In my country the current rate is 15%

[Singuy]

15%!? Which country is this?

[evgeniusleo]

15%!? Which country is this?

The Republic of Belarus is bordered by Russia, Ukraine, Poland, Lithuania and Latvia.

May be less or above this percentage