Hi I have Home equity line of credit with the lasalle bank - Bank reporting as a Revolving in my credit report as you know revolving with high balance really bring you score down so my score is real low - I have tried to dispute thru Credit Bureu but got no results can someone please adviuce I always thought home equity line shold classified as " MORTGAGE " Or "Installement" .. thanks
installment is only for non-revolving accounts. Lines of credit generally are revolving since you can continue to use them yes?
Home Equity Lines of Credit are revolving since you can increase and decrease the amount you are currently using. Home Equity Loans are installment since the amount you are using is fixed. Your credit report is correct.
A MORTGAGE is on real-estate. Both of these are on real-estate. ><- <>- ><- <> ~~~ ><- <>- ><- <> ><- <>- ><- <> ~~~ ><- <>- ><- <>
Ah yes, my Favotrite subject............... HELOC's are great tools if done right. With a HELOC you will normally get a line of credit similar to a credit card (you will receive a "check book") where you borrow money against you home. HELOC's will range in rate but are normally based off of the Prime Rate at any given time. Yes, this means that it does adjust and while the prime rate currently stands at 4%, as recently as January 2001 the prime rate was sitting at 9.5%. You will have a rate of "prime plus 1%" or "prime plus 3%" which means that you will add the prime rate to whatever addition that you are told. Typically with HELOC's you will have a 10-year period where you will draw on the money and make Interest Only payments, meaning you will NOT be paying down the principal on the HELOC. After the initial period your loan will then fully amortize for the next 10 to 15 years and you will make full principal and interest payments. Because an HELOC is a revolving account you will want to watch what is called Utilization. If you have a 50k line of credit and you borrow the full 50k then you will be at 100% use of the line of credit. On credit reports, depending upon your other credit cards and credit usage, this could have an adverse affect on your credit score. The rule of thumb is to try to keep the balance on your line of credit below the 50% mark. This can be done by paying down the amount when extra money is available or obtaining a credit line that is more then what you would realistically use. The actual affect of a HELOC on your credit varies depending upon the borrower. If you have several accounts and a relatively large amount of AVAILABLE credit that is not being use on your credit cards or other accounts then having a HELOC that is high in utilization will probably not have a huge affect on your credit. If, however, you do not have a large amount of available credit, you run the risk of lowering your scores as a high utilization on a HELOC will drag your TOTAL use of available credit down across the board. Where to get a HELOC? The best place to obtain a HELOC is your Bank, Credit Union, or directly with a LENDER that offers this product. Mortgage brokers must attach fees to this product which, while can be done, adds costs to your HELOC that you do not need. View this as a credit card, and you would never go to a "credit card broker" and pay them a fee to get you a card when you could go directly to the issuer and get a card. The fees on a HELOC can range from a few hundred dollars to a "free" HELOC. I say "free" because in some cases you will have an addition to the prime rate that the lender puts on there to compensate them for paying your closing costs. This is not always the case but is common. You may have a yearly maintenance fee that can vary from 25 dollars to 100 dollars a year. If you have a credit card with a very low interest rate and no yearly fees you may want to figure out the benefits of both and make a decision on which one is best for you. Finally, the difference between a HELOC and a Home Equity Loan is that a HEL will be a fixed interest rate (Higher then a HELOC) and will be based on a 10, 15, or sometimes a 30 year term. This loan is what is called a "second mortgage" and the rates will vary depending upon your credit scores and how high the Loan to Value (LTV) is. Some HEL go as high as 125% of the value of your home. I wanted to repost this and yes, it is a revolving account secured by Real Estate...but it is not an installment loan. THIS is why Helocs should be looked at very carefully and if I were you I would switch it to a fixed rate Home Equity Loan and watch your scores rise.
