Quote:
Originally Posted by bizaro86
That's actually a pretty big change. Example: a 40k HELOC at prime plus 1 (4%) has a payment under the current rules of $133. If you changed to 7.5 year amortizations, that goes to $515, which is a pretty significant change.
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I said personal LOC's, and 7.5 was just a random number. Maybe 10 or 15 to start. Also they shouldn't be transferable or you'd just get borrowers jumping from bank to bank. Paying out one to restart the new one.
Maybe make an exception for student lines, or business lines.
Honestly, the guy/gal/family buying the $500,000 house with $100,000 down for an 80% HELOC or mortgage/HELOC combo isn't the problem. Those people aren't driving up home prices or getting out of control.
The individuals who take equity out but still are at 80% may be bright or stupid, but they're still not inflating housing prices unless they're buying more houses but that's their own prerogative and if the lending institution wants to lend them that money it becomes the lenders issue.
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