Wells Fargo Heloc On Investment Property

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What Is A Heloc

Wells Fargo shuttering all personal lines of credit

A HELOC is a popular tool that real estate investors use to draw on the equity in their rental property.

Unlike a home equity loan where funds are received in one lump sum, a HELOC acts as a type of revolving line of credit against the equity in your property. You dont have to draw on it right away, but you know the money is there if and when you need it.

Done Smartly Investing Using A Home Equity Loan Against Your Home Will Make You Rich

Ive seen several interviews on CNBC and Business Insider that ask wealthy people how they became rich. Theyll often say because of leverage. Theyve used other peoples money to make investments that made them money above and beyond the cost of the money.

This is the core of Robert Kiyosakis methodology. Treat your finances as if you are a business, utilizing capital in the best way you can. Use leverage when the numbers work, and take on more risk to become wealthy.

This is not an easy path. There will undoubtedly be more ups and downs along the way. The easy route is the conservative one, to pay off debts and get rich at a snails pace, safely and avoiding volatility.

Perhaps the wealthier you are, the more this thinking resonates with you. Wealthy people can take more significant risks because they have a foundation on which to fall back on. When you crunch the numbers, the math will tell you that borrowing at 2-5% against your home to invest could be highly lucrative over long periods.

Surely some options traders out there borrowed a ton of money at some point and are now fabulously wealthy. Its likely a larger number of people tried options trading on loan and went broke.

And we know from watching Shark Tank, that entrepreneurs borrow money in all kinds of ways to try to make it big. Some succeed. Many fail.

Experienced Mortgage Agents Deliver Big Savings

An experienced agent can also save you thousands on your mortgage by helping you avoid restrictive products offered by big banks. This includes the high penalties that can result from making changes as your mortgage matures. InTrend Mortgage agents are resourceful, and specialize in finding options you wont get anywhere else.

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Alternatives To A Home Equity Loan

A home equity loan is not the right choice for every borrower. Depending on what you need the money for, one of these options may be a better fit:

  • Home equity line of credit : Like a home equity loan, a HELOC allows you to borrow from your home’s equity. However, you’ll borrow from a credit line. Additionally, HELOCs have variable rates.
  • Cash-out refinance: If you can qualify for a lower interest rate than what you’re currently paying on your mortgage, you may want to refinance your mortgage. If you refinance for an amount that’s more than your current mortgage balance, you can pocket the difference in cash.
  • Reverse mortgage: With a reverse mortgage, you receive an advance on your home equity that you don’t have to repay until you leave the home. However, these often come with many fees, and variable interest accrues continuously on the money you receive. These are also only available to older homeowners .
  • Personal loan: Personal loans may have higher interest rates than home equity loans, but they don’t use your home as collateral. Like home equity loans, they have fixed interest rates and disburse money in a lump sum.

Is It A Good Idea To Get A Heloc For My Investment Property

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Whether its a good idea to get a HELOC for your investment property depends on your individual circumstances, financial goals, and intended use for the HELOC.

A HELOC in general could be a good fit if you want a flexible, ongoing source of financing that you can tap into for virtually any purpose. However, make sure youre comfortable with the variable-rate structure of a HELOC, which can cause your rate and monthly payment to unexpectedly change in the future.

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Bank Of America Heloc

Bank of America is one of the United States longest standing and largest banks. The bank was founded in 1904 and manages over $2 trillion in assets. They also have a stellar reputation with their customers and should be a consideration for most individuals interested in a home equity line of credit.

Customer Reputation

Bank of America has an A+ rating with the Better Business Bureau, which means they do an outstanding job of addressing their customers complaints and have a strong reputation with their clients.

Financial Strength

Bank of Americas financial strength is also quite impressive. Theyve been rated financially strong or excellent with all of the major credit rating agencies, including Moodys , Standard & Poors , and Fitch . Their strong credit ratings and a 100+ year track record of business demonstrate BofAs trustworthiness and stability.

Application Process

The application process for the Bank of America home equity line of credit is simple and complete. Those applying simply submit their key information online. The application is free, non-binding, and takes less than 20 minutes to complete.

Interest Rates

The standard interest rate for a HELOC with BofA is currently 4.4 percent . They also occasionally offer low introductory rates for the first year, which can be below the prime rate.

Fees

Discounts & Perks

BofA has a few different interest rate reduction incentives that they offer to customers, including:

How to Access Credit

Wells Fargo Mortgage Rates

Best For

  • Anyone unsure of what type of loan to get

Wells Fargo is one of the largest mortgage lending institutions in the U.S. The bank backs that distinction up with many different mortgage options that vary in term-length, style and size. This breadth provides a high level of customization to make choices based on your specific profile. Thats often lacking when it comes to other lenders and provides a leg up for Wells Fargo. A financial advisor can help you with mortgages and any other financial issues you have.

But taking a mortgage with Wells Fargo isnt all great. In fact, its interest rates and annual percentage rates are slightly higher than a sizable portion of its direct competition. This is partially an indication that Wells Fargos extra costs are higher too, as the APR includes fees and other expenses that the interest rate does not.

These rates assume a credit score of 740 and 0.50 discount points.
Mortgage

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How Do I Get Started

The quickest way to apply is online. Follow these steps:

  • Go to the Wells Fargo website.
  • Hover over Personal. Select Loans and Credit> Home Equity Lines.
  • Scan the credit, home equity and debt-to-income requirements to make sure youre eligible for a loan. Select Continue Online.
  • Choose between an Individual or Joint Loan, and check the box if youre a Wells Fargo customer. Hit Continue.
  • Enter your personal and contact details, income, financial assets, property type and value, and how much youre hoping to borrow.
  • Submit your application. A home loan officer will review it, verify your identity and confirm your homes value via a drive-by or a professional appraisal.
  • If everything checks out, theyll open your home equity account. You should be able to access your funds three days after closing.

    To apply over the phone, call 800-777-9888 weekdays from 7 a.m. to 9 p.m. or Saturday, 8 a.m. to 6 p.m. CT. Otherwise, fill out the contact form on the website to have a loan officer contact you.

    Wells Fargo Pros And Cons

    Working at Wells Fargo – Our Culture

    Compare the benefits and drawbacks of a mortgage with Wells Fargo.

    Pros

    • Fees. You wont know the fees associated with your loan up front.
    • Slow customer service. Some customers complain of slow response times.
    • Numerous lawsuits. Wells Fargo has been at the center of many high-profile lawsuits over the years.

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    Wells Fargo Expert And Consumer Ratings

    We polled nine different websites that had star ratings for Wells Fargo. Those ranged from the Better Business Bureau to Trustpilot and included customer scores and expert reviewers opinions.

    Wells Fargos average star rating across those sources was 2.78 out of 5.

    Thats far from bad. But its not impressive.

    And it reflects its ranking in the J.D. Power 2021 U.S. Primary Mortgage Origination Satisfaction StudySM, in which it scored a solid but unremarkable 832, just a little below the industry average of 851.

    Expert reviewers tend to rank the bank substantially higher than its customers do. And customers rarely go online to say how happy they are with any supplier. Theyre more likely to post something only if theyve had a bad experience.

    And, with Wells Fargo serving one in three households in the United States, its bound to upset a fair number of those millions of customers. All banks do.

    What Is The Difference Between A Home Equity Loan And A Cash

    Home equity loans and cash-out mortgage refinances are both potential ways to get money for home renovations or unexpected expenses. That said, both options have their pros and cons.

    While a home equity loan is a “second mortgage” that allows you to borrow additional funds for nearly any purpose, a cash-out refinance replaces your existing mortgage. With a cash-out refinance, you’ll take out a new mortgage for more than your outstanding loan balance, and then withdraw the difference in cash. Because of this, a home equity loan is typically best if you already have a good rate and terms on your current mortgage. A cash-out refinance only makes sense if you can qualify for a better interest rate on your mortgage and you don’t mind resetting your repayment term.

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    Get Up To $500k With No Monthly Payments

    • Get a cash estimate with no impact on your credit
    • 10-year term for all agreements
    • Available in Arizona, California, Colorado, Florida, Michigan, Minnesota, North Carolina, New Jersey, Nevada, Oregon, South Carolina, Tennessee, Utah, Virginia, and Washington

    For additional resources, check out the list below:

    Let Us Find The Right Mortgage Plan For You

    Wells Fargo Home Mortgage Customer Service

    When you work with an InTrend Mortgage agent, well compare all available mortgage products on the market to find the solution that works best for you.

    Rather than taking on the stress and hassle of calling multiple lenders, youll get a wide variety of options from one mortgage agent that makes all the calls and handles all negotiations on your behalf.

    Whether you are a first home buyer, refinancing your existing mortgage, switching your mortgage or looking to buy an investment property, call an InTrend Mortgage agent for a free mortgage quote today at 905-780-8988.

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    Customer Service & Company Reputation

    A companys reputation is one of the more important factors to consider. When working to set up the terms and details of your credit line, you will probably be speaking with a representative of the lender frequently. Youll want a positive experience, and the best way to ensure that is by going with a company who has a great reputation. Companies like the Better Business Bureau help buyers learn about a company and their reputation before getting involved with them.

    Is It Possible To Get A Heloc On A Rental Property

    Lenders love to make loans to successful real estate investors. Rental property owners can be a great source of recurring fee income and interest payments for a lender.

    Getting a HELOC on your existing rental property can be done but, until you have a proven track record with your go-to lender, you may have to jump through more hoops. Thats because home equity lenders are becoming more strict with their lending criteria, with a laser-sharp focus on your ability to make all monthly payments on time over the entire repayment period.

    Lets look at some of the benefits of getting a HELOC and review the steps you should take to get a yes from your lender when youre shopping around.

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    How To Get A Heloc On An Investment Property

    Editorial Note: The content of this article is based on the authors opinions and recommendations alone. It may not have been reviewed, commissioned or otherwise endorsed by any of our network partners.

    A home equity line of credit on an investment property can provide an on-demand, cost-effective source of cash you can use for almost any purpose, even as the down payment on a new rental property. Still, there are strict qualification limits and potential pitfalls with this loan product.

    Wells Fargo Is Taking A Hard Pass On 53% Of Black Mortgage Applicants

    Wells Fargo to end all existing personal lines of credit: Report

    WFC , the nations third largest bank by assets, is stifling Black homeownership by rejecting refinance applications sent in by Black homeowners, while approving almost three-quarters of those sent in by white applicants. A Bloomberg analysis found that Wells Fargos 47% approval rate gave it the worst record among major lenders when considering refinancing for Black homeowners. Homeownership is still one of the main avenues for all Americans to build wealth, though the national rate of Black homeowners stands at 41%. With nearly $200 billion lost in wealth and equity since the Great Recession, African Americans are at risk to have all median wealth extinguished by 2053, and Wells Fargo gamesmanship with mortgage applications will only make things worse.

    The Breakdown You Need To Know: CultureBanx reported that for Black America the pursuit of the American Dream through homeownership has never wavered with adults in this demographic, between the ages of 26 and 39, sparking a nationwide rise in the overall rate. U.S. Census data shows this group raised the homeownership rate for all Black Americans by more than 2% during the first three quarters of 2020.

    A National Association of Realtors analysis showed 5% of Americans who bought homes were Black. However, Wells Fargo fell well below industry averages when it came to lowering interest rates through a home refinance to African Americans, who were approved 71% of the time by all other lenders.

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    Option : Tapping Home Equity

    Drawing on your home equity, through a home equity loan, home equity line of credit , or cash-out refinance, is a fourth way to secure an investment property. In most cases, itâs possible to borrow up to 80% of the homeâs equity value to use toward the purchase, rehabilitation, and repair of an investment property.

    Using equity to finance a real estate investment has its pros and cons, depending on which type of loan you choose. With a HELOC, for instance, you can borrow against the equity the same as you would with a credit card, and the monthly payments are often interest-only. The rate is usually variable, however, which means it can increase if the prime rate changes.

    A cash-out refinance would come with a fixed rate, but it may extend the life of your existing mortgage. A longer loan term could mean paying more in interest for the primary residence. That would have to be weighed against the anticipated returns that an investment property would bring in.

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    What Is A Home Equity Line Of Credit

    A home equity line of credit, or HELOC , is a credit line in which the collateral is the borrowers equity in his or her home. It provides a revolving line of credit, which most borrowers use to pay for large expenses, such as property renovations or education costs.

    HELOCs can be an attractive method of using credit because interest rates are usually much lower for a HELOC than for a standard credit line, like a credit card.

    When a HELOC is used responsiblyfor example, to invest in renovations or educationit creates additional value for the borrower by increasing the value of their property or by increasing the borrowers value in the workplace. Used irresponsibly, a HELOC can put a borrower into deeper debt and put their property at risk. The U.S. Census estimates that about 3.2 million households in the U.S. have an outstanding line of credit. Of those, approximately 65 percent of borrowers put funds from their credit line toward home improvements, such as additions, repairs, and renovations.

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    Next Steps To Utilizing Your Home Equity Loan Or Line Of Credit

    For any real estate related needs you should always consult with an experienced, local professional. A local agent can give you advice on what repairs are renovations will add the most value in your housing market, update you on local market conditions, and point you toward the right financing tools for your needs.

    A great agent can also help you find deals and investment opportunities that will fit your budget based on how much of a home equity loan you qualify for. Leveraging your existing home equity to start or expand your investment portfolio, or to invest for retirement, can be a wise idea.

    If you are considering taking out a home equity line of credit to finance the sale of your home or to purchase a property, a Clever Partner Agent can help you. Clever connects you with the top agents in your area and guides you through every step of the home search, negotiation, and closing process.

    Heloc On Your Primary Residence

    Wells Fargo Advisors Financial Network

    You may be able to tap into the equity in your main home with a HELOC. These lines of credit typically have variable interest rates, from five to 10 years to take out any funds that you need, and a repayment period of up to 20 years.

    Qualification requirements are typically looser for an owner-occupied home than an investment property, and the interest rates may be lower compared with a personal loan. But if you miss the monthly payments, you may be putting your primary home at risk.

    » MORE:The best HELOC lenders

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