Home credit line
Date: Tue, 06/16/2009 - 17:02
If I have a line of credit on my house and I am still current on my mortgage is there a way to settle on the credit line and still keep the house. BOA has both accounts and the credit line is maxed out and is higher then the mortgage balance. I have been paying interest only on the credit line for 3 years. I don't know if I will ever pay it off. Any advice or suggestions would be appreciated.
What I think is that, you can take a cash out refinance on your
What I think is that, you can take a cash out refinance on your mortgage and pay off your home equity line of credit. If the home equity line of credit cannot be paid in full with the cash out refinance, you can pay the remaining amount through a repayment plan. Now, you will have only one loan, the cash out refinance, which you need to pay off.
I only owe about 8 more years on the house so I don't want to re
I only owe about 8 more years on the house so I don't want to refi back to a 30 year loan. I just wanted to know if I could settle my line of credit like a credit card or is the credit line attached to the house. I would continue to pay my original mortgage.
Quote:What I think is that, you can take a cash out refinance on
Quote:
What I think is that, you can take a cash out refinance on your mortgage and pay off your home equity line of credit. If the home equity line of credit cannot be paid in full with the cash out refinance, you can pay the remaining amount through a repayment plan. Now, you will have only one loan, the cash out refinance, which you need to pay off. |
Holy cow that is dangerous advice. I wouldn't follow that at all.
Guest59 - There are a lot of things that go into this equation, and this sort of thing is not for the feint of heart. But yes, it is possible to settle HELOC loans.
The biggest factors for you should be this: Is there equity in your house, and can they seek a deficiency judgement against you.
If you have equity in your house (Fair Market Value exeeds the loans), or even if there is equity exceeding the first mortgage even if the HELOC is not fully covered, they can foreclose on your home and walk away with money. It's not a good option for them, but it's possible they will foreclose and you should know that going in. If there is no equity in your home the chance the foreclose is lower and this gives you some leverage.
Deficiency laws vary by state, but many HELOC loans are recourse loans. THis means they can sue you for a deficiency judgement in some cases, for any amount that is due after the sale of your home. Keep in mind that some HELOC loans are non-recourse, and if that is the case, they can't sue you. Again, this is important, because if you have a non-recourse loan you have a lot of leverage.
But there are other factors to consider here as well. Just know that it's not easy to pull this off, and I'm in the process of it myself right now.
