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Not in any significant way I can think of. You might possibly have a small impact on your credit score if you run the balance up, but other than that no big deal.
If yu do refi yor would either have to pay off the HELOC or have the lender agree to subordinate it to a new loan. In theory, you could run into LTV/CLTV issues if the HELOC is ore than 75% of the property value.
Tom O'Leary
plannersmortgage.com
Just know your options. If you "decide" to refinance your first mortgage and you HELOC with any balance... it iwll be considered a CASHOUT REFI according to FNMA and FreddieMac... Furthermore, many areas have CASHOUT LTV maximums that could be exceeded by a larger HELOC balance in a sense, trapping you in the loans if you were to keep the. Finally, the last bit of good news is that depending on your credit score as of loans closed in early April 2008, there can be some pretty significant pricing hits for CASHOUT REFIS with scores below 720 and it gets much more painful if your middle score is in the 679 and below.. The LENDER that offered you the HELOC should be able to explain the pros and cons of a HELOC as well and if they can't .... shame on them.... They should know better... This is not about a $350 exit fee.... Just get the facts and if you can... try to stay BELOW 90% with both loans as that seems to the the top of the heap with the best of credit.. We are trudging through deleveraging and you don't want to be trapped that's all.
Good luck!
If you get a new heloc and you then go to refinance, you most definitely will have issues if the new value has dropped. Remember that any subordinate financing is "cash-out" and unless you are under 70% you will pay a cash-out fee of .50% of one point in addition to all other lender fees if you are between 70.01% and 80.00% and as much as 2.25 if your score is under 640 as well just to pay off the line of credit you are now considering. Mortgage rates are currently at 5.50% approx and the prospects of them going lower are not good. Every time the FED cuts short term rates mortgage bonds move in opposite direction because of perceptions about future inflation which is the arch-enemy of mortgage bonds.
For more info, simply send me an email: mortgageplanner@247refi.com
You might run into a prob like mine, it will take too long for your HELOC to sub,Chase took about 1 month, therefore, you will have to pay the early close fee 350bucks.
You better hurry as they are becoming extinct! Matter of fact, I have heard recently from people who have had HELOCS with Countrywide and IndyMac where the lines were suspended. The Countrywide line had a credit limit of 300K and a zero balance!
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Will opening a HELOC hurt future refinance?
Jorabi
Contributions: 6
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I haven't been able to get the quotes I want for a mortgage refinance for cash out, and a local bank is offering a Prime minus .51% HELOC, so I am going to go for it. But if mortgage rates fall more and I can get the terms I am looking for by then, how will I have damaged my application by having this HELOC? There is a $350 fee if I close the HELOC before 3 years.
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