Monday, August 21, 2006

Dallas Real Estate - Refi verse HELOC

I learned something new yesterday which was confirmed today. In Texas, once you do a Home Equity Line of Credit (HELOC) on your house, you cannot refinance the house until the Heloc is paid in full.

I had a listing appt yesterday where I feel so bad for their situation. They originally bought the house with putting down 20% and waiving escrows. After a couple of years, they got behind on taxes and decided they needed to refinance the house and roll the taxes into the mortgage and get everything caught up. It's now a couple of years later, his ARM has gone up to over 11.5% and when he inquired about a refi, he found out he didn't refi a couple of years earlier, it was in fact a Heloc.

At that point in the appt, I just got to look down at my hands on the table and say ohhh and awww. I was speechless. I had never heard of such a thing, and it was confirmed today that the Heloc rule is true. It's so sad when mortgage people don't explain things fully to people. What where they doing giving 8% on a refi two years ago anyway? I asked ifhe had questioned the rate, and his reply was that he trusted them and didn't know to ask.

So sad... hopefully I can help him out of this situation.

1 Comments:

At 10:02 PM, Anonymous Anonymous said...

Please Donna, you're only hearing one side of the story. As a mortgage professional, I explain the pros and cons of loans to customers every day. Many people are very willing to take on these 'risks' with HELOCs. They wish to have this line of credit available.

 

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