Quote:
Originally Posted by ASBSECU E93
Your ability to get a EQL will be driven in large part by where the appraised value of your home will come in. You really need to understand the home market has been hammered from foreclosures and short sales...in many cases, homes have decreased significantly due to factors out of your control. If this is the case, you may not have the equity you are anticipating. The lender will order a residential appraisal and go from there. Should you have the necessary equity to qualify for 80% or less - it's a no-brainer on the EQL at the rate/term you quoted.
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This.
Although, the type of appraisal may vary. For portfolio equity products (which most, if not all, HELOCs are), many lenders will first use an Automated Valuation Model (AVM), which is data based off of sales of comparable properties, appraised taxes, appraisals done in the area, etc. If they don't consider that sufficient, they then may use a Desktop Valuation Model (similar to AVM, but this is handled by a value analyst vs. a computer), Drive By Appraisal, or Full Appraisal.
Some lenders pay for this, some do not. Back when I was a Lending & Credit Officer, I had clients with homes that were expected to appraise for much higher, but once the actual valuation was given, the value of the home was much, much less than expected.
Some lenders will move to the next valuation model automatically, others will halt the loan and allow the customer to make the decision if they want to pay for a full appraisal or not.
At the same time, I know there are lenders that will go up to 95% LTV for HELOCs; my former employing bank did, while the bank I work for now does not. However, rates generally are not as favorable. Generally a 1.5-3% spread increase, due to increased risk to the bank.
As aforementioned, OP, do your research and see which lender would best fit your situation, as you are very close to the 70% LTV breaking point.
Hope this helps.
