Question:

How to read a HELOC APR?

Answer:

The APR of a loan is usually a good starting point when comparing mortgage quotes, not in the case of a HELOC APR, though.

Most loans have APR based on the interest rate plus all closing costs related with the loan. A HELOC will only have APR that will include the interest rate. Since no closing costs are included in a HELOC APR, it is necessary to ask about those on your own. Even though there are many no cost HELOCs offered, often you will have significant closing costs with a HELOC and they will not be included in the APR.

If your equity drops due to depreciation, or you have been delinquent on payments, your HELOC balance may not be readjusted, or will be reduced. Also, the APR of your HELOC may change if rates go up or down. HELOC rates are adjusted more often than other loan rates, and your monthly payments will change, as well. Note that selling the house makes the HELOC due.

Recommended helpful present and future homeowners links:
Why: Refinance to a fixed rate loan while mortgage rates are still low.
Link:
Why: Because FHA loans are insured by the US Federal Government they have very competitive interest rates and are easier to qualify.
Link:
Why: Know and protect your credit report and score.
Link: See All 3 National Credit Scores & 3 Reports Instantly, Online & Free
Link this QnA Print del.icio.us Digg
Was this Mortgage QnA helpful?
Not at all
  • Currently 3/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
 Definitely
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA:

Common misspellings: mortage and morgage