How's this HELOC deal compare?

[Rami W.]

I am shopping for a HELOC with small local banks to see what I can get.

Here are details of an offer. Is this pretty much par what you all are seeing? It would be a line over $100m. The loan fee of 1% seems rough. Is that typical?

Rate: P + 1.0% ...meaning 4.5% currently

Loan Fee: >$100m to $1mm – 1% of Line amount

Documentation Fee: >100m - $350.00

Term 10 yr draw + 15 yr P & I /25 yr maturity.

75% Appraised Value

"There is a 1.00% loan fee plus a $350 doc fee if the line is above $100,000. Closing costs are the appraisal, title insurance and recording costs plus tax service."

I specifically asked about using the HELOC to purchase an additional property because I needed clarity on their term language "Purchase money transactions are NOT PERMITTED under this program." Which I thought meant I could not do this. Their response...

"This means you cannot use a home equity line to purchase the home on which we are securing the line. You must live in the home on which we secure the line."

Any other questions I should be asking? Thank you!

[Juan Lozano]

Usually credit unions HELOCs have a lower interest rate and they might not charge you fees, as long as you keep it open for a few years.