All Forum Posts by: Paul Ellington

Hi Roberto,

Welcome to BP! I’m glad you’ve found such a great resource that has helped me a ton. I live in Leesburg and have been looking at real estate in Winchester as a potential investment market. Feel free to reach out should you have anything I can do to offer some help. Best of luck with your goals!

Paul

@Muoki Musau that is the one! I’m not familiar with anything that meets every week specific to Loudoun.

Hi @Muoki Musau which meetup is that? I'm in Leesburg as well and there is a NoVA REI Meetup that I participate in once per month but I'm not familiar with another specific to Leesburg/Loudoun that meets biweekly.

@Sean Sullivan  I wasn't able to make the first meetup but please add me to any mailing list or reminder email for future meetups please.  Thank you for putting this together! I look forward to meeting everyone.  

Hi @Brian G.. That's exactly right, Prime +1.5% for an investment property HELOC. 10 year draw period with interest only payments and a 20 year repayment so pretty standard otherwise. There is a $99 annual fee if you don't accrue $99 in interest on the loan that year but it is waived if you pay at least that much in interest over the year. They also paid closing which was nice so it only cost me the local tax fees ($88) to open it when it was all said and done. Now I'm working on refinancing my primary residence and getting pre-approved for an investment property purchase. Depending on the appraisal for my primary we might open a HELOC on my primary as well just to maximize our access to capital.

Update: @Trevor Aydelott we just closed on our HELOC on the investment property with Penfed. Thank you so much for helping me get the ball rolling. 4.75% interest only payments on a rental property HELOC was a lot better than I originally thought would be possible. Just wanted to say thank you again for the help at the beginning.

Update: @Kyle J. we closed on our HELOC yesterday and got notification today that it is finalized. We don't have a monthly payment due unless we draw on it like you said. Thank you again for the information

Thank you again for taking the time to read that!  I now see what you mean in terms of an "Advance" that would then require a minimum payment.  We close Tuesday morning and this is the first time having any type of equity line on a property so I wasn't sure what was normal.  I still plan to call my loan officer tomorrow but am very grateful for your help.

Cheers,

Paul

@Kyle J. Thank you so much for the detailed answer.  That makes total sense and I think you must be right the way I read it now.  If you don't mind reading this as it's the entire minimum payment portion of the contract but I am hopeful you're right and will keep you updated on this once I close on Tuesday. 

"MINIMUM PAYMENT. Each billing statement we send you will identify a minimum monthly payment amount that you must pay. During the Advance Period (including any extension thereof), your minimum monthly payment will be the greater of $100.00 or the accrued finance charge, plus any fees and amounts past due, rounded up to the nearest $0.01."

Thanks again, I will reach out to PenFed on Monday to clarify and with closing on Tuesday hope to be purchasing another rental soon! 

Gratefully,

Paul

Hi @Josh Walker thank you for the great information! I am closing on a HELOC for my investment property next week and they advertised "interest only payments" during the draw period but when I read the final contract that I will be signing it reads "minimum monthly payment will be the greater of $100 or the accrued finance charge, plus any fees and amounts past due." I interpret this to mean that even if I don't use the HELOC I will have to pay $100/mo. unless the interest on my draw plus any fees exceeds 100 dollars. At the rate offered I could draw 25k to equal a monthly interest payment of 100 dollars and then deploy that capital somewhere instead of paying $100/mo. for no reason. My biggest question to you would be is this a normal term for a HELOC or have you found banks that require no monthly payment if you have no balance? This is my first HELOC and I'm not sure what is "normal" but I had to call 10+ banks just to find one willing to open a HELOC on an investment property so my options appear limited and $100/mo. would easily be negated by a rental property's income if I choose to deploy the capital instead of not using the HELOC. Any thoughts/advice is greatly appreciated! Thanks for the info above too, if you have time would you mind sharing what recasting a mortgage is as I'm unfamiliar.