Did you have Home Equity News
I want to take out a home equity line of credit. I applied at ditech.com and
had a terrible experience with the worst customer service I've ever
encountered, so I canceled the application. I need help understanding how
the interest works. Nothing ditech told me made sense. Their version is that
the line of credit would be $15,000. As soon as I use any of it I would
start paying an amount of interest per month that is 10 percent of $15,000
regardless of how much of the line of credit I used. I could use $50 but
still have to start paying all that interest. And, I would have to keep
paying it for ten years, even if I paid off the amount of the line of credit
I used. Does that sound right? I'd end up paying interest on money I never
used. I can't imagine anyone agreeing to that kind of a deal. Can anyone
explain this? Or, recommend printed or on-line resources I can use to
educate myself?
A bank home equity line of credit lets you borrow money that you
need, often by writing a check against your line of credit. You
pay interest on the amount you borrow, although possibly they might
insist you take it in whole hundreds of dollars, and there might
be a minimum loan (NOT likely to be the whole credit line, though).
The interest rates for a home equity line of credit should be less
than non-promotional interest rates on credit cards.
There is also the home equity loan, in which you borrow the FULL AMOUNT,
and you pay interest on all of it. If you leave it in the account they
set up for you rather than spending or investing it, that's stupidity
on your part. You might possibly borrow an amount you set, then spend
it over a period of several months on home improvements or something.
It's not a line of credit, so don't use it like one.
Banks, however, may staple-gun bar codes to your head or think of
endless ways to say NO to using your miles credit (For documentation,
see Washington Mutual or Capital One TV ads).