Home Equity loan -pay points? How to decide between two banks??

slc2053April 9, 2007

Hi,

I'm first time visitor and poster to this forum...so If I ask something that you can easily answer by sending me to a previous thread, go right ahead. We're debating between banks with similar interest rates for a home equity loan...how do we decide when both banks seem like they are well established? Can we discuss banks here? We're trying to decide between Wachovia and Sovereign...Wachovia boasts that they won't sell our loan...is that important? I've had loans sold before with no consequences (that I saw)...also their rates are very, very close, but one requires an account at their bank (a checking..) and the other doesn't...Wachovia doesn't, Sovereign does...yet Sovereign's rates are .10 lower...when banks seem similar when it comes to a home equity loan, how do you decide??

Thanks.

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saphire

Do you have to pay the loan out of the checking account? Is there a minimum balance or do you have to actually use the checking account? Are there any closing costs, fees, title or appraisal fees, attoeny fees, application fees. Do you have to pay any points. Will either Escrow your taxes or require additional insurance

Are there any prepayment penalties

If all things are the same and you do not have to keep much money in the checking account or pay the loan out of it I would go with the lower rate. I personally do not care if they sell the loan

    Bookmark   April 9, 2007 at 11:55PM
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sparksals

There's alot of lenders who don't charge points or closing costs for a home equity loan. You also want to find out if there is any prepayment penalty on the HE loan.

We got our HELOC through USAA. No closing costs. No points. No charge for appraisal. Nothing. And we got prime -1 for the rate.

Shop around, you could find a more favourable rate without paying the points.

    Bookmark   April 16, 2007 at 2:33AM
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saphire

Good point, we paid a total of $75.00 on a fixed rate HELO at market rate in 2005. They have been great so far. It was with Commerce

    Bookmark   April 16, 2007 at 11:44AM
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