Equity Credit Line (esp Colo?)
Question: Anyway, having just finished re-financing, I have a bunch of documentation (appraisal, title insurance, etc). Since I’ve now got some pretty reasonable equity in the house, I’m thinking about one of the equity credit line accounts.
Now, they have these in Arizona (for example, Security Pacific), but so far I havn’t been able to find anything similar in Colorado. Since the house is there, I presume I’d have to have the account with some financial institution in the same state. I’m thinking about this because it turns out that I may have to replace my heating unit in the fairly near future. Rather than get a home improvement loan, I’m thinking the “revolving charge” arrangement might be more convenient. If you are aware of pros/cons or institutions in Colo that might offer something along these lines, please drop me a message.
Answer: Yes and no. In most cases (much depends on state law), lenders from other states may open branch offices in Colorado; for example, Citicorp Mortgage in Denver is a mortgage-company subsidiary of Citibank NA, New York, Countrywide Funding is based in CA, and Maryland National Mortgage… well, you get the idea. In most cases, though, a home equity loan is only available from banks and thrifts (not mortgage companies). At today’s rates, that’s not a bad idea. Plus, as you know, you have the flexibility to borrow only as much as you need today, and still have that line of credit available tomorrow. As I say, try banks, savings banks, savings & loans, and (if you belong) credit unions. Compare not just the interest rate, but how the rate will be adjusted (usually every quarter, based on Prime Rate plus ??%); interest rate “caps” (limits on upward movements), and — very important — whether or not there is a “balloon” payment due at some point.
Also, try the Money Scorecard, which appears in every issue of MONEY magazine; they publish a list of home equity loans in some metros around the country. It will give you some places to start. And, it’s published by a company which has a name very much like my own (by pure coincidence
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