bank of america home equity loan payoff

Bank of America is not an authorized USDA lender. Refinance loan options and home equity loans at BofA. Borrowers can refinance an existing mortgage using the. There are a few key differences between a home equity loan and a line of credit, including: Interest rate: Home equity loans offer a fixed rate for the life of. When considering a home equity loan or credit line, shop around and compare loan plans offered by banks, savings and loans, credit unions, and mortgage. bank of america home equity loan payoff

Bank of america home equity loan payoff -

Defaulting on Home Equity Loans and HELOCs

Home equity loans and home equity lines of credit (HELOCs) are affordable ways to tap the equity in your home to use for home improvements, pay for education, and pay off credit cards or other higher-interest types of debt. These debt instruments are secured by your property and typically have lower interest rates than non-secured loans.

Key Takeaways

  • Home equity loans and home equity lines of credit (HELOCs) are two key types of debt used to tap the equity in your home.
  • Defaulting on either can result in foreclosure, but what the lender will actually do largely depends on the amount of equity you have in your home.
  • The more equity, the more likely your lender will choose to foreclose.
  • However, if you're underwater on your home, the lender may choose to sue you personally for the money you owe.
  • Many lenders will work with you if you're struggling to make payments, such as modifying the loan, but it's important to contact them as soon as possible.

Formerly, the interest paid on these loans, used for personal items, was tax-deductible. However, with the advent of the Tax Cuts and Jobs Act (TCJA), the interest will only be deductible if the loans “are used to buy, build or substantially improve the taxpayer’s home that secures the loan,” as stated by the Internal Revenue Service (IRS).

Home Equity Loans vs. HELOCs

There are two types of debt instruments used to turn the equity in your home into cash. The first is a home equity loan, which is a set amount of money financed for a set period (usually five to 15 years) at a fixed interest rate and with a fixed payment.

The second is a HELOC, which has a variable interest rate and functions more like a credit card with an expiration date (often up to 10 years after the line of credit is taken out). You can run into trouble with either type of debt if you have serious financial problems, lose your job, or experience an unexpected illness.

A further complication of a HELOC is the stark contrast between the initial phase ("draw" period), when you have access to the line of credit and may have to pay only interest on the money you borrow, and the second (much more costly) "repayment" phase, when the line of credit expires and you must begin repaying both principal and interest on your remaining balance.

Lenders Won’t Automatically Foreclose

Defaulting on a home equity loan or HELOC could result in foreclosure. What the home equity lender actually does depends on the value of your home. If you have equity in your home, your lender will likely initiate foreclosure, because it has a decent chance of recovering some of its money after the first mortgage is paid off. The more equity, the more likely your lender will choose to foreclose.

If you are underwater—your home is worth less than the amount you owe—your home equity lender may be less likely to foreclose. That’s because the first mortgage has priority, meaning that it's likely that the home equity loan or HELOC holder will not receive any money after a foreclosure.

Instead, the lender may choose to sue you personally for the money you owe. While a lawsuit may seem less scary than foreclosure proceedings, it can still hurt your credit, and lenders can garnish wages, try to repossess other property, or levy your bank accounts to get what is owed.

Don’t Wait to Act

Most mortgage lenders and banks don’t want you to default on your home equity loan or HELOC, so they will work with you if you are struggling to make payments. Should that happen, it's important to contact your lender as soon as possible. The last thing you should do is try to duck the problem. Lenders may not be so willing to work with you if you have ignored their calls and letters offering help.

When it comes to what the lender can do, there are a few options. Some lenders offer to modify your loan or line of credit. This can include modifying the terms, such as interest rate, monthly payments, or loan length—or some combination of the three. For example, Bank of America offers HELOC modifications for borrowers that:

  • Have had the loan for at least nine months
  • Have not received any kind of home equity assistance in the last 12 months or twice in the last five years
  • Are undergoing financial hardship

Other private lenders—such as Sallie Mae, which offers student loans—work with a borrower who is struggling to meet payments by offering multiple deferments and forbearance options. For borrowers who don’t qualify, Bank of America offers payment extensions or repayment plans to catch up on delinquent payments.

Limited Government Help

Help from the federal government is limited. The Obama administration's Home Affordable Modification Program (HAMP), which allowed eligible homeowners to reduce monthly payments, including those for home equity loans and HELOCs, was closed to new applicants at the end of 2016. 

The Making Home Affordable mortgage assistance options page, however, has information and advice on seeking help from your lender, depending on whether your problem is temporary or long term.

If you live in one of the 18 states plus the District of Columbia that participates in the Hardest Hit Fund, you might be able to qualify for assistance there. Some states have already concluded their application process, and no applications will be accepted in any state after Dec. 31, 2020.

The Bottom Line

Home equity loans and HELOCs allow you to tap into the equity in your home. If you find yourself in trouble, you have options, including lender workouts and limited government help. The key in all options is to get help right away instead of hoping the problem will disappear on its own.

Источник: https://www.investopedia.com/mortgage/heloc/cant-pay-back/

 

Both allow you to borrow against the appraised value of your home, providing you with cash when you need it. Here's what the terms mean and the differences between a home equity line and loan that can help you figure out whether they're the right fit for you.

If you’ve built up equity in your home—if it’s worth more than the balance on your mortgage—you may be able to use part of that value to meet financial needs such as cash for home improvement projects, education expenses or to pay for unexpected costs.

Home equity lines of credit (HELOCs) and home equity loans (HELOANs) are two ways to achieve similar ends. But they are different, and understanding how each one works can help you decide whether one or the other might work for you.

What is a home equity line of credit?

Unlike a conventional loan, a home equity line of credit is something you establish ahead of time and use when and if you need it. In that way, it’s a little like a credit card, except with a HELOC, your home is used as collateral.

  • A HELOC has a credit limit and a specified borrowing period, which is typically 10 years. During that time, you can tap into your line of credit to withdraw money (up to your credit limit) when you need it. You use the funds only when you need to, and you can continue to use the funds as you repay them.
  • You only pay interest on the money you use.
  • Most HELOCs charge variable interest rates. Those rates are tied to a benchmark interest rate and can adjust up or down.
  • During the borrowing period, you’ll need to make at least minimum monthly payments on the amount you owe. Some HELOCs allow interest-only payments during the borrowing period. Other HELOCs require minimum payments of principal and interest.
  • Once the borrowing period ends, you’ll repay the remaining balance on your HELOC, with interest, just like a regular loan. The repayment period is usually 10 or 20 years.
  • You may be able to convert some or all of the balance you owe on a variable-rate HELOC to a fixed-rate loan.

Learn more about how a home equity line of credit works.

What is a home equity loan?

If a HELOC resembles a credit card, a home equity loan is more like the original home mortgage. You borrow a specific amount, and then you make regular payments during a fixed repayment period.

  • With a home equity loan, you apply for the amount you need.
  • Most charge a fixed interest rate that doesn’t change during the life of the loan.
  • Each payment, the same every month (if it is a fixed-rate HELOAN), includes interest charges and a portion of the loan principal.

How can you use home equity?

Your home may be your most valuable asset, and borrowing against your equity in it could free up cash for any of several purposes. You might use the money to:

  • Finance a home-improvement project. Under the recent tax law, interest on a HELOC or HELOAN used to “buy, build or substantially improve” a home may be tax deductible. Consult your tax advisor.
  • Consolidate what you owe on credit cards or other higher-rate debts into a single loan. Since your home is used as collateral for HELOCs and HELOANs, these loans may have lower interest rates than other kinds of loans.
  • Cover emergency expenses. If you’ve used up the cash in your emergency fund, you could draw on a HELOC to pay for house repairs, medical bills or other unexpected costs.
  • Help pay for education tuition and fees. Home equity line or home equity loan interest rates may be lower than rates on college loans.

Is a home equity line or loan right for you?

A HELOC gives you the flexibility of a financial backstop that’s there when you need it. If your roof needs repair or a tuition bill comes due when you’re short of cash, drawing on a home equity line of credit can be a convenient solution. You decide when to use the funds, and you pay interest only on the money you actually use. On the flip side, with a HELOAN, you get a lump sum of cash at loan closing, and know how much your monthly payments will be and how long it will take to pay off the loan.

With either, the amount you can borrow will depend on the value of your home and the amount of equity you have available. And with both, it’s important to remember that you’re using your home as collateral—and it could be at risk if its value drops or there’s an interruption in your income.

But if you qualify and your financial situation is stable, a home equity line or a home equity loan could be a helpful, cost-effective tool for making the most of your home’s value.

Want more information? Learn about home equity lines

Ready to apply? Apply online now

What are the differences between a HELOC and HELOAN?

 Home equity loanHome equity line of credit
An adjustable interest rate 
A fixed interest rate
(fixed rate loan option)
Lump sum 
Draw money as you need it 
You only pay interest on the money you use 
   
                          
Источник: https://www.bankofamerica.com/mortgage/learn/home-equity-loan-vs-line-of-credit/

Pay off your home equity line of credit account

If you’ve paid off your account and have a $0 balance, you can either close your account or you can keep it open for future use (as long as you're within your draw period). In either case, feel free to contact us to make sure you’re familiar with the terms and conditions as you may need to take action to avoid any fees.

Important: Your home equity line of credit is secured by a lien on your property which is on record with your local county recorder’s office. If you intend to pay off your account entirely, your local county clerk’s office typically charges a fee for processing the release of the lien on your property. We don't set this lien release cost, but will include it in your payoff quote.

 

The basics of paying off your HELOC account

  • You can count on us to provide you with a free payoff quote with important information about paying off your HELOC.
  • As long as your home equity line of credit remains open, the lien on your property will remain in place.
  • If you want to have the lien released you must request a payoff quote and close your account providing us with an authorization to close form when you send your payoff funds.

 

How to pay off HELOC

Here's what you should do to pay off and close your account:

  1. Request a payoff quote
  2. Pay the full balance on your payoff quote
  3. Complete and send us the authorization to close your account
Источник: https://www.chase.com/personal/home-equity/customer-service/info/pay-off-account

5 Reasons To Avoid A Home Equity Line of Credit

For some, a Home Equity Line of Credit can be more of a liability than an asset.

If you've been paying off your mortgage for a couple of years and have built up some equity in your home, you have likely considered opening a Home Equity Line of Credit (HELOC).

What is home equity?

Home equity is essentially the amount of your home that you own. It is the difference between how much you owe on your loan and how much your house is worth. For example, if your home is worth $200,000 and you have paid off $25,000 of your mortgage, plus put down 20% ($40,000), you would essentially have $65,000 equity in your home.

What is a Home Equity Line Of Credit?

A HELOC is a lot like a credit card, but the limit is based on the amount of equity that you have in your home. Many banks will give you a line of credit equal to about 80% of your equity, so the owner of the $200,000 house in the above example would be able to borrow about $52,000.

A HELOC is convenient for many reasons:

  • You can open it but not ever use it and just keep it there as an "emergency fund."
  • The debt is sometimes tax deductible, which is very convenient if you are looking to consolidate credit cards and other debt, which has a high interest rate, and payments are not tax deductible.
  • You can use it to pay for large ticket items like a house renovation, medical bills, college tuition, or a new car where you need instant access to huge sums.

Like anything, a HELOC can get you in trouble. Here are 5 reasons that you might want to avoid getting a HELOC:

1.) Miss payments and you can lose your home: Unlike a credit card, a HELOC represents secured debt. Guess what the security on that debt is? Your home! Default on your HELOC and you could lose your home. If you are the kind of person who is predisposed to running up lots of debt, perhaps a HELOC is not for you.

2.) It's not a dependable emergency fund: If you have set up your HELOC and plan to use it as an emergency fund, think again. Banks can freeze your HELOC at any time and often do when there is a drop in the job market or a drop in your credit-both of which can happen at a time when you most need your emergency fund. Again, if you are in a situation where you end up not being able to pay the HELOC back, you will lose your home.

3.) It's not free money, just more debt: A HELOC can make you think that you actually have more money than you really do. It's not free money, it's just more debt. You've worked hard to build up the equity in your home; it's not worth it to blow that with carefree HELOC spending. Plus, when you have to pay the HELOC back, you will have the double whammy of paying your mortgage and the HELOC at the same time. Isn't your goal to ultimately get out of debt?

4.) Some HELOCs require a balloon repayment: Some HELOCs require that you pay back all of your cash using a balloon payment at the end of your withdrawal period. If finances are already tight and you are literally using your HELOC as a credit card, a lump sum payment may be out of the question.

5.) You many not be able to refinance without paying off your HELOC first: Some lenders won't let you refinance without paying off your HELOC first. If you have plans to refinance in the next few years and think that the HELOC will be too much of a temptation, don't get started.

The most important thing to remember is that a Home Equity Line of credit is not free money. It's debt that you are adding to your pile, debt that you had previously paid off.

Of course, there are many good uses for a HELOC and many benefits of using that type of credit over high interest rate credit cards. Stillunless you have a solid repayment plan and have carefully considered all of the things that could possibly go wrong with your HELOC, you shouldn't get one!

Источник: https://www.mortgageloan.com/

Consider a Home Equity Line of Credit1

1 Terms and Fees: Home Equity Lines of Credit (HELOCs) are subject to credit qualification and collateral valuation. Fees, conditions and restrictions apply. Product details can be found in our Important Terms Brochure; ask for a copy or click here. Offers subject to change without notice. Evidence of adequate property insurance required. Combined total discounts may not exceed 1.50% for the draw period or lower the rate less than the floor of 3.00%.

All HELOCs feature a 10-year variable rate draw period requiring a monthly interest-only payment subject to a $100 minimum. Annual Percentage Rate (APR) during the draw period may change as often as monthly. The draw period is followed by a fixed-rate fully-amortizing repayment period of 120, 180 or 240 months, depending on the balance at the end of the draw period. APR during the repayment period will be fixed, based on the Prime Rate in effect at the end of the draw period, plus a margin and other factors. The APR will not exceed 18.00% (13.00% APR in Oklahoma) and will not go below 3.00% regardless of your qualifying margin or applicable discounts. Fees: an annual fee up to $75 applies subject to state law limitations; a $100 Fixed Rate Loan Option fee may apply if option is exercised or reversed. Ask a Bank of the West representative for details.

The APR for a HELOC during the draw period is variable based on the Prime Rate as published in The Wall Street Journal, plus a margin. The Prime Rate as of March 16, 2020 is 3.25%. As of October 1, 2021, margins range from -0.810% to 5.375% with corresponding APRs ranging from 3.000% to 8.875% for lines of credit between $15,000 and $2,000,000 and are subject to change at any time. APR will depend on factors including property value, location, and occupancy status, creditworthiness, existing debt against the property, approved line of credit amount, and your account relationships with Bank of the West.

2 Automatic payment discount of 0.125% off the standard rate requires applicants to establish automatic monthly payments from their new or existing Bank of the West personal checking or savings account. Discounts may be reversed and your rate and payments may increase if automatic payments are discontinued for any reason. All terms and conditions applicable to the checking or savings account apply, including fees and minimum opening deposits. Additional benefits may be available for eligible customers of Bank of the West and its affiliates (ask us for details).

3The HELOC Energy Efficiency Discount is subject to change at any time. Discount is 0.25% off standard rate sheet pricing for the draw period. Applicants must finance at least $5000 for new solar energy equipment or energy efficient products in order to qualify for the discount. Applicants provides - no less than 10 days prior to account opening– a written estimate satisfactory to Bank of the West from a licensed contractor for the purchase and installation of an eligible energy efficiency product. (Click here to review our complete list.) The written estimate must be dated no earlier than 60 days prior to account opening and not expire until at least 5 days after account opening. Written estimate must clearly identify products being installed and indicate ENERGY STAR certification (except solar). Bank of the West reserves the right to verify the written estimate, the validity of the renewable energy improvement, and may request written certification of the applicant's intentions.

4 A balance-based discount of 0.10% off our standard margin for every $10,000 drawn up to a maximum of 1.00% (for advances of $100,000 or more) is available for new Bank of the West HELOC customers with an initial advance of least $10,000 taken on the date of HELOC opening (subject to the credit limit and a rescission period, if applicable). The amount advanced at HELOC opening will determine the margin for the remainder of the 10-year draw period. An initial advance amount of less than $10,000 is not eligible for this promotion.

5 Fixed Rate Loan Option ("FRLO") rates are determined based on factors in effect at HELOC origination. Requirements and limitations are applicable to FRLOs. Details can be found in our Important Terms brochure. You may convert all or a portion of your outstanding variable rate principal balance using a FRLO, resulting in a fixed rate and fixed payment of principal and interest for the balance converted. The minimum advance from an existing HELOC that can be converted is $5,000. The minimum FRLO term is one year, and the maximum term varies based on the amount you choose to convert. Rates for the FRLO are often higher than the current variable rate on the HELOC account. Minimum payment due on a FRLO includes principal and interest in fixed monthly payments, subject to a minimum payment of $100 per month, in addition to the payment due on any separate variable rate balance. There is a $100 Fixed Rate Loan Option fee, payable each time you establish or reverse a FRLO.

6 Calculators are provided as a convenience. Bank of the West makes no warranties about the accuracy or completeness of the calculations.

Bank of the West Wealth Management Group provides financial products and services through Bank of the West and its various affiliates and subsidiaries.

Securities and variable annuities are offered through BancWest Investment Services, a registered broker/dealer, member FINRA/SIPC, and SEC Registered Investment adviser. Financial Advisors are Registered Representatives of BancWest Investment Services. Fixed annuities/insurance products are offered through BancWest Insurance Agency in California, (License #0C52321) and through BancWest Investment Services, Inc. in all other states where it is licensed to do business. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business. Bank of the West and its various affiliates and subsidiaries are not tax or legal advisors.

Bank of the West is a wholly owned subsidiary of BNP Paribas.

Investment and Insurance Products:

  • NOT FDIC INSURED
  • NOT BANK GUARANTEED
  • MAY LOSE VALUE
  • NOT A DEPOSIT
  • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Источник: https://www.bankofthewest.com/personal-banking/loans/home-equity.html

Servicing your home equity line of credit account

You already know that your home equity line of credit allows you to access funds when and where you need them, but what if you need more? What happens at the end of the borrowing period?

Keep reading to discover:

  • How to request a larger credit limit
  • How to transfer funds to consolidate debt
  • What happens to your account at the end of your draw period

Need more buying power with your home equity line of credit?

Do more with your home equity line of credit (HELOC). If you're in need of extra buying power and are looking for additional home equity financing, there are no fees to apply for a new line of credit with a higher credit limit and no closing costs. When you apply to refinance your home equity line of credit (HELOC) you'll receive (if approved):

  • A new HELOC account with a larger line to suit your ongoing needs
  • A new 10-year draw period
  • No application fees or closing costs

Use your line of credit to make home improvements, pay for education expenses or consolidate your higher-interest-rate debt.

Get started today

Apply now to refinance with a new HELOC.

Please note: Upon approval and completion of a HELOC refinance, your new account will require variable-rate monthly minimum payments that include principal and interest during both the draw and the repayment period ($100 minimum required). Your account will also have an updated term of 30 years (10-year draw period and 20-year repayment period) and your existing line of credit interest rate will adjust to current interest rates.

Home equity line of credit transfer

A smart way to consolidate higher interest-rate debt

Save time and use your low-rate Bank of America home equity line of credit (HELOC) to finance home improvements, pay for education or consolidate higher interest-rate debt.

Use your available HELOC balance to consolidate debt from:

  • Credit cards
  • Revolving charge cards (for example: home improvement stores and department stores)
  • Installment loans

Tell us which higher-interest installment loans or credit cards you’d like to pay using your HELOC. You could soon benefit from lower monthly interest payments and a single bill each month.

Transferring is quick and easy

There are no transfer fees, and your interest may be tax deductible. To get started, simply sign in to Online Banking. You can transfer funds directly from your HELOC to other Bank of America accounts, or to your creditors through Online Bill Pay.

Home equity line of credit end of draw

Preparing for your home equity line of credit end of draw

Your home equity line of credit (HELOC) is a form of revolving credit. You borrow from the available equity in your home, which is used as collateral for the line of credit.

During the draw period (or borrowing period), you can access funds through the line of credit to pay for expenses. Terms can vary, but typically the draw period will be up to 10 years, after which you’ll reach end of draw and no longer be able to borrow against your HELOC.

What you need to know

It’s important to understand which type of HELOC financing you have. This will determine your repayment method once you reach end of draw.

  • Balloon home equity line of credit: When your borrowing period ends, the balance on the account will become due. A balloon payment, or a large lump-sum of the outstanding balance, will be required.
  • Standard home equity line of credit: When your borrowing period ends, the repayment period will begin. You will need to make monthly payments (consisting of both principal and interest) to repay the outstanding balance.

Your minimum payments are about to change

If you were making minimal or interest-only payments during the borrowing period, you may notice a significant increase in your monthly payments when your repayment period begins. You will now be responsible for paying both principal and interest each month, so plan accordingly and don’t get caught off-guard by the larger payment amount.

Options to consider

As you near or reach your end of draw, you have the following options:

  • Apply for a new home equity line of credit or other home loan. If you have an outstanding balance and are approved for a new HELOC, you can move that balance over and again borrow funds for up to 10 years to cover home improvement projects or other necessary expenses.
  • Start repaying your principal balance through the repayment period.
  • Pay off your balance in full, ahead of time.
  • Contact a home equity specialist if you think you’ll be unable to afford your new payment. You may qualify for a program to help reduce your payment.

If you have questions about your account, please call and speak to one of our home equity specialists.

   

     

Источник: https://www.bankofamerica.com/home-equity/servicing-your-home-equity-line-of-credit/

Servicing your home equity line of credit account

You already know that your home equity line of credit allows you to access funds when and where you need them, but what if you need more? What happens at the end of the borrowing period?

Keep reading to discover:

  • How to request a larger credit limit
  • How to transfer funds to consolidate debt
  • What happens to your account at the end of your draw period

Need more buying power with your home equity line of credit?

Do more with your home equity line of credit (HELOC). If you're in need of extra buying power and are looking for additional home equity financing, there are no fees to apply for a new line of credit with a higher credit limit and no closing costs. When you apply to refinance your home equity line of credit (HELOC) you'll receive (if approved):

  • A new HELOC account with a larger line to suit your ongoing needs
  • A new 10-year draw period
  • No application fees or closing costs

Use your line of credit to make home improvements, pay for education expenses or consolidate your higher-interest-rate debt.

Get started today

Apply now to refinance with a new HELOC.

Please note: Upon approval and completion of a HELOC refinance, your new account will require variable-rate monthly minimum payments that include principal and interest during both the draw and the repayment period ($100 minimum required). Your account will also have an updated term of 30 years (10-year draw period and 20-year repayment period) and your existing line of credit interest rate will adjust to current interest rates.

Home equity line of credit transfer

A smart way to consolidate higher interest-rate debt

Save time and use your low-rate Bank of America home equity line of credit (HELOC) to finance home improvements, pay for education or consolidate higher interest-rate debt.

Use your available HELOC balance to consolidate debt from:

  • Credit cards
  • Revolving charge cards (for example: home improvement stores and department stores)
  • Installment loans

Tell us which higher-interest installment loans or credit cards you’d like to pay using your HELOC. You could soon benefit from lower monthly interest payments and a single bill each month.

Transferring is quick and easy

There are no transfer fees, and your interest may be tax deductible. To get started, simply sign in to Online Banking. You can transfer funds directly from your HELOC to other Bank of America accounts, or to your creditors through Online Bill Pay.

Home equity line of credit end of draw

Preparing for your home equity line of credit end of draw

Your home equity line of credit (HELOC) is a form of revolving credit. You borrow from the available equity in your home, which is used as collateral for the line of credit.

During the draw period (or borrowing period), you can access funds through the line of credit to pay for expenses. Terms can vary, but typically the draw period will be up to 10 years, after which you’ll reach end of draw and no longer be able to borrow against your HELOC.

What you need to know

It’s important to understand which type of HELOC financing you have. This will determine your repayment method once you reach end of draw.

  • Balloon home equity line of credit: When your borrowing period ends, the balance on the account will become due. A balloon payment, or a large lump-sum of the outstanding balance, will be required.
  • Standard home equity line of credit: When your borrowing period ends, the repayment period will begin. You will need to make monthly payments (consisting of both principal and interest) to repay the outstanding balance.

Your minimum payments are about to change

If you were making minimal or interest-only payments during the borrowing period, you may notice a significant increase in ncsecu online access monthly payments when your repayment period begins. You will now be responsible for paying both principal and interest each month, so plan accordingly and don’t get caught off-guard by the larger payment amount.

Options to consider

As you near or reach your end of draw, you have the following options:

  • Apply for a new home equity line of credit or other home loan. If you have an outstanding balance and are approved for a new HELOC, you can move that balance over and again borrow funds for up to 10 years to cover home improvement projects or other necessary expenses.
  • Start repaying your principal balance through the repayment period.
  • Pay off your balance in full, ahead of time.
  • Contact a home equity specialist if you think you’ll be unable to afford your new payment. You may qualify for a program to help reduce your payment.

If you have questions about your account, please call and speak to one of our home equity specialists.

   

     

Источник: https://www.bankofamerica.com/home-equity/servicing-your-home-equity-line-of-credit/

Best Ways to Pay Off Every Type of Loan

A little bit of debt can be a good thing. If you approach borrowing strategically, you can eliminate higher-interest debt that may be weighing you down, lock in low-interest loans and use the extra cash to boost your investments for retirement or contribute to an emergency fund.

Now is a particularly good time to scrutinize the debt side of your ledger. Interest rates on most kinds of loans should remain low even as the Federal Reserve continues to target higher short-term rates, which would increase payments on many variable-rate debts—notably, most credit cards and home-equity lines of credit, as well as some private student loans. Below, we've arranged the most common types of debt roughly in the order of payoff priority. Generally, if you have a FICO credit score of about 740 or 750 or higher, you’ll qualify for the best rates on any type of loan. But some lenders will offer low rates to borrowers with scores closer to 700.

Credit cards. Unless you're milking a 0%-introductory-rate offer, there's a good chance that any credit card debt you are carrying is costing you a bundle, making it a prime candidate for accelerated payments. Interest payments don't qualify for a tax deduction (except for those on expenses related to a business), and the average rate on cards that charge interest is 13.9%, according to the Federal Reserve.

Explore ways to trim the rate, such as transferring the balance to a home-equity loan or line of credit, personal loan, or a new credit card. The Chase Slate card, for example, charges no interest for the first 15 months and levies no balance-transfer fee as long as you move the money within 60 days of opening the account. Whatever card you're considering, account for the annual fee and any balance-transfer fee (typically about 3% of the balance) before you decide whether the move will be worthwhile. If you have a limited-time low-rate offer, make a plan to pay off as much of the debt home remedies for diarrhea possible before the deal expires.

Another option: Ask your issuer to lower the rate on your current card. About two-thirds of customers who did so were successful, according to a recent CreditCards.com survey.

Auto loans. The average rate on a four- or five-year bank loan for a new car was recently about 4%, according to the Fed. But in 2015 through November, nearly 10% of dealer-financed car loans had 0% interest rates, reports Edmunds.com, and Edmunds expects such offers to continue for "qualified" borrowers (often those with a credit score of about 700 or higher). If you nab a great deal on a car loan, making minimum payments could be a smart move. You can use the cash you would have spent up front on the car for savings or investments.

But the collateral (your vehicle) is a depreciating asset, so you could end up "underwater"—owing more on the loan than the car is worth. Avoid loans that stretch the repayment term beyond five years. If you are already committed to a longer-term car loan, try to increase the monthly payment beyond the minimum to build equity more quickly. And if you're not paying a rock-bottom rate, look into ways to refinance. You may be able to get a better deal by moving the debt to a home-equity loan or line of credit or by refinancing with a new lender. Pentagon Federal Credit Union recently offered a rate as low as 1.5% on an auto loan refi, and Capital One Auto Loan Refinance had rates starting at 3%.

Student loans. The interest you pay on student debt and your options for repayment depend on whether best buy credit card bill pay phone number loans are federal or private and the type of loan you have within each category. Direct subsidized and unsubsidized federal loans for undergraduates granted from July 1, 2015, to June 30, 2016, carry a fixed rate of 4.3%; your rate may be lower or higher if you took out the loan at another time. Private student loans come with a fixed or variable rate. Wells Fargo, for example, recently charged fixed rates ranging from 5.9% to 10.5% and variable rates of 3.4% to 8.8% (rates depend on several factors, including credit history of the borrower and any cosigner) for undergraduates attending a traditional four-year college.

Whether you have federal or private loans, don't miss out on the tax break: You can deduct up to $2,500 a year in interest payments if your modified adjusted gross income is up to $65,000 for a single person or $130,000 if you’re married filing jointly. The deduction phases out eventually, disappearing if your income is $80,000 or more on a single return or $160,000 or more on a joint return. Check whether you can get a discount (often a 0.25-percentage-point reduction on interest) for having payments automatically withdrawn from your bank account.

Generally, federal student loans provide more avenues for flexible repayment, says Mark Kantrowitz, publisher and vice president of strategy for college information site Cappex.com. Plans for overburdened borrowers with federal loans include income-driven repayment (which caps your payment at 10% to 20% of your income), extended repayment, and deferment or forbearance (which allow you to delay or reduce payments).

If you have a private loan and are having trouble keeping up with payments, talk to your lender. Relief programs can save you from default in a pinch, but putting as much as you can afford toward student debt is optimal if you’re on solid financial ground. You may save money by consolidating or refinancing your loans (see New Ways to Refinance Your Loans Online), but consider whether you can save just as much by paying off your current loans more quickly.

As a parent, you may be helping your kids by taking on debt yourself, such as a federal PLUS loan or private loan, or paying off your student’s loan with a home-equity line of credit (HELOC). Parent PLUS loans come with fewer options for repayment than federal loans that your student takes on, but they are eligible for extended repayment, deferment and forbearance. A parent PLUS loan is also eligible for income-contingent repayment (payments are usually capped at 20% of your discretionary income) if the loan entered repayment on or after July 1, 2006, and if it's part of a Federal Direct Consolidation Loan. Or having your child make payments to you to help cover your debt (at a lower rate than the student would pay otherwise) may be a win-win.

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Home-equity lending. Borrowing against your house can be a savvy strategy to finance home renovations or to consolidate other forms of debt. (If you are applying for a new loan or line of credit, account for closing costs and other fees.) The average fixed rate on a home-equity loan (a lump-sum payout) was recently 6.3%, and a variable-rate home-equity line of credit averaged 5.1%, according to mortgage research site HSH.com. If you itemize deductions on your tax return, you can usually write off interest payments on up to $100,000 of your loan balance. A separate, higher limit of $1 million usually applies if you use the money for substantial home improvements.

Home-equity lenders tightened up after the housing bust, but loans are readily available again to borrowers with plenty of equity. The terms aren't as generous as they once were. Many lenders limit home-equity borrowing to a total 80% loan-to-value ratio—-that is, the combined balance of your first mortgage and your home-equity loan as a proportion of your home’s market value.

HELOCs typically come with a draw period of 10 years, when you may be able to make payments of interest only. Afterward, you'll have to pay interest plus principal—and that could be a shock if you have to fork over increasing interest on a variable-rate line of credit as the Fed hikes rates. Increasing payments during the draw period can mitigate the pain later. Some HELOCs—including those from lenders as large as Bank of America and Wells Fargo—-have a provision to convert all or a portion of the credit line to a fixed rate. If you expect to be paying off the debt for several more years, making the switch (or refinancing the debt with a new fixed-rate home-equity loan, if a conversion isn’t an option) may be worthwhile as interest rates rise.

Mortgages. With a mortgage, you can build equity in an asset whose value ideally will appreciate. Plus, interest rates are still at historic lows—a 30-year fixed-rate loan recently averaged 4.1%, according to HSH.com. That means you may still be able to get a better deal than your current home loan by refinancing. If you the farmers state bank of waupaca on your tax return, mortgage interest is generally tax-deductible on up to $1 million in debt to buy, build or improve your first and second homes.

Managing your mortgage debt could boil down to deciding whether to increase payments and retire the loan early. If you have less than 20% equity in your bank of america home equity loan payoff with a conventional loan, you have to pay for private mortgage insurance; you can request a cancellation of PMI when you reach the 20% mark (you may have to submit an appraisal). The lender must cancel PMI automatically when your equity reaches 22%. Paying extra until you can remove PMI could also lower the amount of interest you pay.

Beyond that, sticking with minimum payments on a low-rate mortgage can free up more cash for investing, saving or other productive uses of your money. Many people dream of being mortgage-free by the time they retire, but that’s not necessarily the best move, says Johanna Fox Turner, senior partner at Milestones Financial Planning, in Mayfield, Ky. "Don't let retirement savings suffer to double up on home payments," says Turner. Still, if all your financial ducks are in a row and you're otherwise debt-free, finishing off your home loan faster may be worth the peace of mind.

A plan to reduce debt

In theory, paying off debt is simple: Look for options to refinance with more favorable terms, and focus on paying down balances with the highest interest rates first. But debt is nearly bank of america home equity loan payoff much a psychological issue as a financial one. For people who are prone to overspending when they have access to credit—the problem that puts many in over their heads in the first place—tactics such as transferring a high-interest credit card balance to a lower-rate personal or home-equity loan could backfire, miring them deeper in debt if they continue using credit cards.

To tailor a personal payoff strategy, organize all your debts on a spreadsheet. Then scrutinize your budget to find areas where you can squeeze out extra money to speed up payments on the debts that are costing you the most. (Watch out for prepayment penalties on some home and car loans.) Experts say that for some, reducing balances by size, from smallest to largest, is more effective than paying off high-interest debt first because you’ll check off individual debts more quickly, providing the gratification and momentum you need to see the plan to the end.

If you're struggling to keep up with payments, ask the lender about programs that lower the interest rate or monthly payments while keeping the account in good standing. "They don't always offer those up front, so you have to ask leading questions," says Bruce McClary, spokesman for the National Foundation for Credit Counseling. The NFCC can connect you with agencies that offer free or low-cost services to help you manage debt.

Источник: https://www.kiplinger.com/article/credit/t017-c000-s002-best-ways-to-pay-off-every-type-of-loan.html

5 Reasons To Avoid A Home Equity Bank of america home equity loan payoff of Credit

For some, a Home Equity Line of Credit can be more of bank of america home equity loan payoff liability than an asset.

If you've been paying off your mortgage for a couple of years and have built up some equity in your home, you have likely considered opening a Home Equity Line of Credit (HELOC).

What is home equity?

Home equity is essentially the amount of your home that you own. It is the difference between how much you owe on your loan and how much your house is worth. For example, if your home is worth $200,000 and you have paid off $25,000 of your mortgage, plus put down 20% ($40,000), you would essentially have $65,000 equity in your home.

What is a Home Equity Line Of Credit?

A HELOC is a lot like a credit card, but the limit is based on the amount of equity that you have in your home. Many banks will give you a line of credit equal to about 80% of your equity, so the owner of the $200,000 house in the above example would be able to borrow about $52,000.

A HELOC is convenient for many reasons:

  • You can open it but not ever use it and just keep it there as an "emergency fund."
  • The debt is sometimes tax deductible, which is very convenient if you are looking to consolidate credit cards and other debt, which has a high interest rate, and payments are not tax deductible.
  • You can use it to pay for large ticket items like a house renovation, medical bills, college tuition, or a new car where you need instant access to huge sums.

Like anything, a HELOC can get you in trouble. Here are 5 reasons that you might want to avoid getting a HELOC:

1.) Miss payments and you can lose your home: Unlike a credit card, a HELOC represents secured debt. Guess what the security on that debt is? Your home! Default on your HELOC and you could lose your home. If you are the kind of person who is predisposed to running up lots of debt, perhaps a HELOC is not for you.

2.) It's not a dependable emergency fund: If you have set up your HELOC and plan to use bank of america home equity loan payoff as an emergency fund, think again. Banks can freeze your HELOC at any time and often do when there is a drop in the job market or a drop in your credit-both of which can happen at a time when you most need your emergency fund. Again, if you are in a situation where you end up not being able to pay the HELOC back, you will lose your home.

3.) It's not free money, just more debt: A HELOC can make you think that you actually have more money than you really do. It's not free money, it's just more debt. You've worked hard to build up the equity in your home; it's not worth it to blow that with carefree HELOC spending. Plus, when you have to pay the HELOC back, you will have the double whammy of paying your mortgage and the HELOC at the same time. Isn't your goal to ultimately get out of debt?

4.) Some HELOCs require a balloon repayment: Some HELOCs require that you pay back all of your cash using a balloon payment at the end of your withdrawal period. If finances are already tight and you are literally using your HELOC as a credit card, bank of america home equity loan payoff lump sum payment may be out of the question.

5.) You many not be able to refinance without paying off your HELOC first: Some lenders won't let you refinance without paying off your HELOC first. If you have plans to refinance in the next few years and think that the HELOC will be too much of a temptation, don't get started.

The most important thing to remember is that a Home Equity Line of credit is not free money. It's debt that you are adding to your pile, debt that you had previously paid off.

Of course, there are many good uses for a HELOC and many benefits of using that type of credit over high interest rate credit cards. Stillunless you have a solid repayment plan and have carefully considered all of the things that could possibly go wrong with your HELOC, you shouldn't get one!

Источник: https://www.mortgageloan.com/

Consider a Home Equity Line of Credit1

1 Terms and Fees: Home Equity Lines of Credit (HELOCs) are subject to credit qualification and collateral valuation. Fees, conditions and restrictions apply. Product details can be found in our Important Terms Brochure; ask for a copy or click here. Offers subject to change without notice. Evidence of adequate property insurance required. Combined total discounts may not exceed 1.50% for the draw period or lower the rate less than the floor of 3.00%.

All HELOCs feature a 10-year variable rate draw period requiring a monthly interest-only payment subject to a $100 minimum. Annual Percentage Rate (APR) during the draw period may change as often as monthly. The draw period is followed by a fixed-rate fully-amortizing repayment period of 120, 180 or 240 months, depending on the balance at the end of the draw period. APR during the repayment period will be fixed, based on the Prime Rate in effect at the end of the draw period, plus a margin and other factors. The APR will not exceed 18.00% (13.00% APR in Oklahoma) and will not go below 3.00% regardless of your qualifying margin or applicable discounts. Fees: an annual fee up to $75 applies subject to state law limitations; a $100 Fixed Rate Loan Option fee may apply if option is exercised or reversed. Ask a Bank of the West representative for details.

The APR for a HELOC during the draw period is variable based on the Prime Rate as published in The Wall Street Journal, plus a margin. The Prime Rate as of March 16, 2020 is 3.25%. As of October 1, 2021, margins range from -0.810% to 5.375% with corresponding APRs ranging from 3.000% to 8.875% for lines of credit between $15,000 and $2,000,000 and are subject to change at any time. APR will depend on factors how do i find my sprint account number property value, location, and occupancy status, creditworthiness, existing debt against the property, approved line of credit amount, and your account relationships with Bank of the West.

2 Automatic payment discount of 0.125% off the standard rate requires applicants to establish automatic monthly payments from their new or existing Bank of the West personal checking or savings account. Discounts may be reversed and your rate and payments may increase if automatic payments are discontinued for any reason. All terms and conditions applicable to the checking or savings account apply, including fees and minimum opening deposits. Additional benefits may be available for eligible customers of Bank of the West and its affiliates (ask us for details).

3The HELOC Energy Efficiency Discount is subject to change at any time. Discount is 0.25% off standard rate sheet pricing for the draw period. Applicants must finance at least $5000 for new solar energy equipment bank of america home equity loan payoff energy efficient products in order to qualify for the discount. Applicants provides - no less than 10 days prior to account opening– a written estimate satisfactory to Bank of the West from a licensed contractor for the purchase and installation of an eligible energy efficiency product. (Click here to review our complete list.) The written estimate must be dated no earlier than 60 days prior to account opening and not expire until at least 5 days after account opening. Written estimate must clearly identify products being installed and indicate ENERGY STAR certification (except solar). Bank of the West reserves the right to verify the written estimate, the validity of the renewable energy improvement, and may request written certification of the applicant's intentions.

4 A balance-based discount of 0.10% off our standard margin for every $10,000 drawn up to a maximum of 1.00% (for advances of $100,000 or more) is available for new Bank of the West HELOC customers with an initial advance of least $10,000 taken on the date of HELOC opening (subject to the credit limit and a rescission period, if applicable). The amount advanced at HELOC opening will determine the margin for the remainder of the 10-year draw period. An initial advance amount of less than $10,000 is not eligible for this promotion.

5 Fixed Rate Loan Option ("FRLO") rates are determined based on factors in effect at HELOC origination. Requirements and limitations are applicable to FRLOs. Details can be found in our Important Terms brochure. You may convert all or a portion of your outstanding variable rate principal balance using a FRLO, resulting in a fixed rate and fixed payment of principal and interest for the balance converted. The minimum advance from an existing HELOC that can be converted is $5,000. The minimum FRLO term is one year, and the maximum term varies based on the amount you choose to convert. Rates for the FRLO are often higher than the current variable rate on the HELOC account. Minimum payment due on a FRLO includes principal and interest in fixed monthly payments, subject to a minimum payment of $100 per month, in addition to the payment due on any separate variable rate balance. There is a $100 Fixed Rate Loan Option fee, payable each time you establish or reverse a FRLO.

6 Calculators are provided as a convenience. Bank of the West makes no warranties about the accuracy or completeness of the calculations.

Bank of the West Wealth Management Group provides financial products and services through Bank of the West and its various affiliates and subsidiaries.

Securities and variable annuities are offered through BancWest Investment Services, a registered nwcu email, member FINRA/SIPC, and SEC Registered Investment adviser. Financial Advisors are Registered Representatives of BancWest Investment Services. Fixed annuities/insurance products are offered through BancWest Insurance Agency in California, (License #0C52321) and through BancWest Investment Services, Inc. in all other states where it is licensed to do business. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business. Bank of the West and its various affiliates and subsidiaries are not tax or legal advisors.

Bank of the West is a wholly owned subsidiary of BNP Paribas.

Investment and Insurance Products:

  • NOT FDIC INSURED
  • NOT BANK GUARANTEED
  • MAY LOSE VALUE
  • NOT A DEPOSIT
  • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
Источник: https://www.bankofthewest.com/personal-banking/loans/home-equity.html

Home Equity Lines of Credit

Bonus Offer

Offer is bank of america home equity loan payoff on new accounts only. To qualify, company must spend $3,000 within the first three months of account opening to receive the bonus. 10,000 bonus points will be credited within 60 days of qualification under the description: Commercial Spend Bonus.

Earning Points

Base Rewards Tier: Earns (i) one (1) point for each dollar you spend for net retail purchases (gross retail purchases less any returns or credits), (ii) three (3) points for each dollar you spend for net retail purchases in the follow rewards category: gas stations (2 additional points on top of the 1 point per dollar earned on net retail purchases), (iii) two (2) points for each dollar you spend for net retail purchases in the following rewards categories: restaurants and travel (airlines, auto rental, and lodging) (1 additional point on top of the 1 point per dollar earned on net retail purchases).

Rewards Categories: Merchants who accept Visa credit cards bank of america home equity loan payoff assigned a merchant code, which is determined by the merchant or its processor in accordance with Visa procedures based on the kinds of products and services they primarily sell. We group similar merchant codes into categories for purposes of making reward offers to you. We make every effort to include all relevant merchant codes in our rewards categories. However, even though a merchant or some of the items that it sells may appear to fit within a rewards category, the merchant may not have a merchant code in that category. When this occurs, purchases with that merchant won't qualify for rewards offers on purchases in that category.

Businesses may earn up to 10,000 points per calendar month, excluding bonus points. Points earned are available for redemption for a 3 year term. Points expiring during the year will be cleared from the Program Account on the last day of the month in which they expire.

Rewards Redemption

Businesses in the Base Rewards Tier may redeem points for (i) cash back to a First Citizens checking or savings account or credit card statement credits, (ii) credit towards a First Citizens personal loan or mortgage principal, (iii) Pay Me Back statement credits, (iv) travel rewards, including airline tickets, hotel, car rentals, cruises and tours, (v) retail gift cards and certificates and (vi) merchandise and (vii) donations.

These Terms are only a summary. Other restrictions and requirements apply. The full First Citizens Rewards® Program Rules will be provided upon enrollment and are accessible via the program website at FirstCitizensRewards.com at log in.

Program Rules are subject to change or cancellation without notice.

Источник: https://www.firstcitizens.com/personal/loans/home/home-equity-line-of-credit

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