PenFed HELOC 2.75%

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Third Federal is a joke. Their electronic appraisal system is horrible! I applied and the appraisal was extremely low.... (more)

jeffj19 (Apr. 21, 2009 @ 10:40a) |

Agreed, I did not like the Third Federal policy of them doing another appraisal given I told them I just had one done fo... (more)

Caryite (Apr. 21, 2009 @ 12:44p) |

Funny, this is the same exact thing that happened to me. It did not matter that I had an appraisal done a few weeks ago... (more)

jeffj19 (Apr. 21, 2009 @ 1:11p) |

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Nice to know about, although you'll be liable for closing costs if you don't keep it for two years. That's something to think about if you're going to re-fi and can't subordinate the HELOC. I'm not clear on what the re-financing language in the disclosure means. I'd hope there'd be no annual fees for the HELOC or minimum draw amounts.

10K - 400K. Non-owner occupied is 4.25% APR (Prime + 1%).

Home Equity Line of Credit Disclosure:
(Up to 80% of Fair Market Value (FMV) available.) Minimum payment may not repay principal, which will result in balloon payment at the end of the 15-year draw period. Available in all states. Loans with LTV greater than 80% available at a higher rates, and loans with LTV greater than 80% are limited to $200,000. Maximum Combined Loan to Value (CLTV) in Texas is 80%. Additional restrictions apply to Texas.

ELOCs are available up to a maximum 80% LTV.

Refinancing: If a ELOC is over 1 year old, the policy remains the same and the member must take at least an additional $10,000 above the payoff amount when refinancing. Otherwise, if less than 1 year since the ELOC closed, the member must take at least $25,000 above the payoff amount when refinancing. Non-owner occupied properties are Prime+1% APR variable rate. Property insurance required. Maximum APR is 18%.

Other terms and conditions apply; call for details. Should an appraisal be required, one will be ordered by Pentagon Federal at the memberís expense.

Closing Costs: Pentagon Federal will pay all closing costs associated with the Equity or ELOC loan. Should this loan be paid off or closed within 24 months from the anniversary date of the loan closing, the member will be obligated to pay Pentagon Federal the full amount of the total closing cost for the loan.

Anyone know how harsh their credit requirements are? Finished a AOR about 2-3 months ago and still have 17k(20k line) balance left(0% for 18 month) and ~720 fico(832 before AOR). Seem like a good deal

When a loan is tied to prime like this, how quickly does it change when prime changes? Do payments change the next month, or is there a periodical adjustment rate?

Dear PenFed CU please lend me 100k at 2.75%.
I won't have any trouble making the payments as I will simply deposit the money into Alliant CU collect 3.5% interest, pay you and keep the difference.

I'm itemizing my taxes, so the 2.75% is deductible and my net profit after all taxes is about 1/2%.

There is a HELOC thread discussing different options, but ThirdFederal Bankis cheaper at 2.60% currently and no closing costs

Treffen said: Dear PenFed CU please lend me 100k at 2.75%.
I won't have any trouble making the payments as I will simply deposit the money into Alliant CU collect 3.5% interest, pay you and keep the difference.

I'm itemizing my taxes, so the 2.75% is deductible and my net profit after all taxes is about 1/2%.


Can you let me know your income level and credit score?

I apllied 3 times in the past everytime got rejected.

wca53 said: Treffen said: Dear PenFed CU please lend me 100k at 2.75%.
I won't have any trouble making the payments as I will simply deposit the money into Alliant CU collect 3.5% interest, pay you and keep the difference.

I'm itemizing my taxes, so the 2.75% is deductible and my net profit after all taxes is about 1/2%.


Can you let me know your income level and credit score?

I apllied 3 times in the past everytime got rejected.

Did you call PenFed and try to find out their requirements for getting the HELOC? For example, Debt-to-Income ration (DTI) is also a factor. You should try to find this out even before applying, otherwise you might be needlessly accumulating hard credit inquiries, which will lower your FICO score and make you even less likely to be able to get their product.

glxpass said: wca53 said: Treffen said: Dear PenFed CU please lend me 100k at 2.75%.
I won't have any trouble making the payments as I will simply deposit the money into Alliant CU collect 3.5% interest, pay you and keep the difference.

I'm itemizing my taxes, so the 2.75% is deductible and my net profit after all taxes is about 1/2%.


Can you let me know your income level and credit score?

I apllied 3 times in the past everytime got rejected.

Did you call PenFed and try to find out their requirements for getting the HELOC? For example, Debt-to-Income ration (DTI) is also a factor. You should try to find this out even before applying, otherwise you might be needlessly accumulating hard credit inquiries, which will lower your FICO score and make you even less likely to be able to get their product.


I just applied again today, Got rejected.

Might be because I asked 200k of HELOC? IF I would ask 50k I guess might be ok...

Should I call tomorrow and talk to them? ask if I lower my Line.

wca53 said: glxpass said: wca53 said: Treffen said: Dear PenFed CU please lend me 100k at 2.75%.
I won't have any trouble making the payments as I will simply deposit the money into Alliant CU collect 3.5% interest, pay you and keep the difference.

I'm itemizing my taxes, so the 2.75% is deductible and my net profit after all taxes is about 1/2%.


Can you let me know your income level and credit score?

I apllied 3 times in the past everytime got rejected.

Did you call PenFed and try to find out their requirements for getting the HELOC? For example, Debt-to-Income ration (DTI) is also a factor. You should try to find this out even before applying, otherwise you might be needlessly accumulating hard credit inquiries, which will lower your FICO score and make you even less likely to be able to get their product.


I just applied again today, Got rejected.

Might be because I asked 200k of HELOC? IF I would ask 50k I guess might be ok...

Should I call tomorrow and talk to them? ask if I lower my Line.

I hate to see you (or anyone for that matter) continuing to run into a brick wall. Not that I'm calling you insane, but one definition of insanity is continuing to do the same exact thing and somehow expecting different results.

Yes, I'd call them tomorrow and talk with them before applying yet again. You might also want to get your FICO scores at myFICO.com. You can search the internet for promotion codes for myFICO.com that would give you a break on the cost of the three FICO scores. You should also figure out your DTI and the LTV of your current mortgage + the desired amount of the HELOC. Often, anything over 80% will either exclude you from a HELOC product or make the requirements to get the HELOC more difficult.

If you're uncertain about any of the terms I'm mentioning or the concepts behind a HELOC, I suggest you do some research before giving PenFed a call. You should know your way around HELOCs before applying for them, just as with any other financial product. My $.02.

So, is this the question? I apply for, say, a 100K HELOC. Get it at 2.75. Invest it in a cd at 4.00. Earn $1225.00 per year. Is it worth $1200 for the trouble?

Treffen said: Dear PenFed CU please lend me 100k at 2.75%.
I won't have any trouble making the payments as I will simply deposit the money into Alliant CU collect 3.5% interest, pay you and keep the difference.

I'm itemizing my taxes, so the 2.75% is deductible and my net profit after all taxes is about 1/2%.


I was just pondering this type of situation. I have an existing Chase HELOC which just went down to 2.74%. Of the $200k line, I have more than $100k available. ...what to do..., ...what to do...?

KHTC said: Treffen said: Dear PenFed CU please lend me 100k at 2.75%.
I won't have any trouble making the payments as I will simply deposit the money into Alliant CU collect 3.5% interest, pay you and keep the difference.

I'm itemizing my taxes, so the 2.75% is deductible and my net profit after all taxes is about 1/2%.


I was just pondering this type of situation. I have an existing Chase HELOC which just went down to 2.74%. Of the $200k line, I have more than $100k available. ...what to do..., ...what to do...?


I'm not up to speed on all the rules for deducting home mtg interest, and obviously the deduction is critical, so be careful there. I'm sure I'm good to deduct interest on 100k but not sure beyond that.

fir2 said: So, is this the question? I apply for, say, a 100K HELOC. Get it at 2.75. Invest it in a cd at 4.00. Earn $1225.00 per year. Is it worth $1200 for the trouble?

What trouble? Fill out an application, send the money off to the bank, make a payment every month. The only reason I'd think it not worth it is if it screws up an AOR, but those are so passe nowadays anyway.

It is a VARIABLE interest rate.....

WalStMonky said: fir2 said: So, is this the question? I apply for, say, a 100K HELOC. Get it at 2.75. Invest it in a cd at 4.00. Earn $1225.00 per year. Is it worth $1200 for the trouble?

What trouble? Fill out an application, send the money off to the bank, make a payment every month. The only reason I'd think it not worth it is if it screws up an AOR, but those are so passe nowadays anyway.
I wonder if a PenFed HELOC will be viewed as credit card debt, potentially adversely affecting the credit score if a high fraction of the line is used.

What do they base your homes value on? Tax assessment, full interior appraisal, drive-by appraisal, or a computer automated valuation model? Bummer that their FIXED rate has been 4.99% for about a year now without going down.

EricGo07 said: WalStMonky said: fir2 said: So, is this the question? I apply for, say, a 100K HELOC. Get it at 2.75. Invest it in a cd at 4.00. Earn $1225.00 per year. Is it worth $1200 for the trouble?

What trouble? Fill out an application, send the money off to the bank, make a payment every month. The only reason I'd think it not worth it is if it screws up an AOR, but those are so passe nowadays anyway.
I wonder if a PenFed HELOC will be viewed as credit card debt, potentially adversely affecting the credit score if a high fraction of the line is used.


It always showed up as a home loan for us. They did issue a 16 digit alternate account number that started with 4 and processed as if it were a Visa account, but issued no little plastic card to more conveniently access the credit line. So it was great as a target for BTs. Note that you should discount my info as is at least 3 years old, and from a different credit era.

WSM: I had a HELOC with PenFed back then too. I remember my credit report showing the HELOC line as a home mortgage (or similar wording), but vaguely remember the HELOC line as being part of the calculation of debt:credit. Or may be I am just imagining things. I am applying for this PenFed HELOC again now to pay off my 6% HEL, and decided on a HELOC credit limit high enough to keep my utilization ratio below 70%. May not be needed, but easy for me to do to avoid a nasty surprise.

As you mention, one of the true benefits of the PenFed HELOC is the ease in which lower cost credit card money can be sent to it. Admittedly there is less of that available, but it's not zero. Yesterday I received an offer on my $40k BOA NEA card to borrow money at 2% apr with a $30 capped transfer fee for 9 months. I have to look around for more cheap money.

PenFed outdid themselves this time (and that is saying something): I applied for the HELOC on Sunday evening, and by Wednesday I was invited to call them to set up the closing -- now scheduled for Monday. 48 hour processing, ~ 11 days till money available, and that *includes* weekend, mandatory reccission period, and mail !

No one should view this as typical since I already had a loan with them and was only refinancing; I'm just cheering for PenFed. Btw, Penfed used an electronic appraisal only for me. I don't know what their thresholds are, but my line is about 45% of the e-appraisal.

I was going to get a HELOC from PenFed also. I have a few investment properties, either free and clear or with loan-to-value of 50% to 70%. My plan was to replace one of the 1st position mortgages with such a cheap HELOC (prime + 1%)

No go.

They don't give a HELOC to people with more than 4 mortgaged properties.

I still believe that HELOCs are not sold to Fannie Mae/ Freddie Mac, so there should be banks giving HELOCs to guys like me. It just appears to be a PenFed guideline.

-Peter

If you ask for a line greater than 60% LTV, they require a full appraisal. You have to pay for the appraisal and schedule it during day light hours (so they can take pictures). If you keep your line under 60% LTV, they base your home value off of your area's comps.

Dont rag on me, but would that even be legal? To get the 2.75 loan, collect the interest from another bank and pay it off?

2004 I got Pen fed HELOC for 1.99%

skigle1 said: Dont rag on me, but would that even be legal? To get the 2.75 loan, collect the interest from another bank and pay it off?

pretty much descibes what a bank does.

I just closed on my non-owner occupied 4-plex HELOC @ Penfed. Cost me around $400. No closing costs, but they required me to pay for the appraisal. They originally quoted me an appraisal fee of around $250+ but then after they cahrged me, they realized they're error and i made them split the difference. All-in-all it was a pleasant process. I was contacted the day after the application to set up an appointment for the appraisal which was the day after Christmas. Sent in my docs (leases and paystubs) and closed early this week. Prime+1%.

What really makes me wonder is how come through the whole process (including opening a savings account) They never once asked me to send them a copy of my ID? Talk about identity theft risk.

Wizzerdo said: What really makes me wonder is how come through the whole process (including opening a savings account) They never once asked me to send them a copy of my ID? Talk about identity theft risk.

Doesn't closing the loan require the documents to be notarized? Photo ID should be checked at that time.

Yes that was the only time my ID was checked...not when I opened the account however. Notary doesn't mean anything though. If someone was trying to steal my identity for 200k, i think they could find away to get the docs notarized...

I've been looking into this and just found the thread. My CSR told me you can make interest only payments or 1.5% of the balance? Also told me the closing costs (if I payoff within 2 yrs) is about $700 (in GA). Was going to do a 30 yr cash-out refi but this sounds much better for my situation. Two months of 2.75% interest saves more than the closing costs compared to 5.25% interest on a large amount. I'm considering asking for 80% (I have no loans on my house). My CSR also said if the county appraisal showed the value I'm stating then I wouldn't need an appraisal (and she knew I wanted 80%). If she's right (and sgtDave is wrong) I won't need an appraisal. Couple questions:

For those that needed an appraisal, did the appraisers walk through or just take pictures of the outside?
On your credit report, does it show the payment as the interest only amount? i.e. does this help your DTI substantially over a typical P&I loan?
Say I get a $150,000 line, and I want to refinance it to a 30 yr fixed this summer. Would this be considered a cash-out refi?

They approved my HELOC for 80% LTV without requiring physical appraisal. They used a computer appraisal which has a lower number than I'd like so if I want more then I need to get an appraisal. Credit score was 40-60 pts below my numbers from TrueCredit. Took all of 4 days from application to get approval via email. However, they are requiring me to payoff an old home equity loan on a house I converted to rental after living in for 3 years. This is opposite of what I was told prior to applying (by two different CSRs) so beware of what the CSRs tell you...I'm going to discuss the issue and hopefully they don't require me to payoff the old HEL. Otherwise this was a waste of a credit hit.

EDIT: my approval was for 60% LTV of their electronic appraisal value which was within 10% of my goal (not 80% of a substantially lower valuation like I assumed). They confirmed that anything over 60% LTV requires a physical appraisal. Getting a physical appraisal does risk getting a lower valuation, but I can borrow 80% of the lower valuation.

Vmaxer said: They approved my HELOC for 80% LTV without requiring physical appraisal. They used a computer appraisal which has a lower number than I'd like so if I want more then I need to get an appraisal. Credit score was 40-60 pts below my numbers from TrueCredit. Took all of 4 days from application to get approval via email. However, they are requiring me to payoff an old home equity loan on a house I converted to rental after living in for 3 years. This is opposite of what I was told prior to applying (by two different CSRs) so beware of what the CSRs tell you...I'm going to discuss the issue and hopefully they don't require me to payoff the old HEL. Otherwise this was a waste of a credit hit.

Is your old home equity loan on your other house also with PenFed?

Yes, they wanted me to use the proceeds of new HELOC to payoff the old HEL (both with PenFed).

however, after a discussion with a supervisor the issue has been cleared up and they will make an exception to allow me to have two owner-occupied loans. Technically, it isn't a rental. I use the house about 6 days per month (although I have a roommate) so it's still considered owner-occupied by their standards. They are making the exception since all other factors are good (DTI below 40% and credit well above 650) and I must provide a letter from my employer explaining how I live in two states and a statement from me saying I actively occupy both homes. They might have made the exception from the start, but my income information was entered wrong so they thought my DTI was close to 60% and they weren't clear on whether the old house was a rental or second home.

Some more info if it helps anyone.

I got a 1st mortgage with PenFed, closed October 2008. Appraisal for the first mortgage came in at 160K. In late Jan/early Feb I applied for the HELOC. They told me an appraisal was only good for 4 months. I applied for the HELOC within the 4 month period, but they made me get another appraisal since it wouldn't close within 4 months of the last appraisal. $290 fee later, my new appraisal came in at 140K which didn't leave enough room for their 10K minimum HELOC under 80% LTV.

All in all, Penfed has been great. However, my personal opinion is that they are using more conservative appraisers in this financial climate. My area is fairly stable, and I understand differences in appraisals, but I was definitely low-balled the second time around.

Hi, I am wondering if anyone had recent experience with penfed on heloc and how long will it close? can you take out money as soon as you close on a heloc?

many thanks!

It seems the rates adjust once a quarter, and that is end of this month.

Mine HELOC is approved, but today I got an email asking 'PFCU WILL NEED TO ORDER AN APPRAISAL. THERE IS A NON-REFUNDABLE FEE OF $290.' I thought there is no fees involved. Is this common or negotiable?

mak101 said: Mine HELOC is approved, but today I got an email asking 'PFCU WILL NEED TO ORDER AN APPRAISAL. THERE IS A NON-REFUNDABLE FEE OF $290.' I thought there is no fees involved. Is this common or negotiable?

Nope, I had to pay for an appraisal.

mak101 said: Mine HELOC is approved, but today I got an email asking 'PFCU WILL NEED TO ORDER AN APPRAISAL. THERE IS A NON-REFUNDABLE FEE OF $290.' I thought there is no fees involved. Is this common or negotiable?

If you've had an appraisal w/in the last 3-4 months you may be able to use it - I faxed them a copy of one I had done about 2 months prior and they used it.

tribetime said: If you've had an appraisal w/in the last 3-4 months you may be able to use it - I faxed them a copy of one I had done about 2 months prior and they used it.

Not necessarily. I had a full appraisal done a month ago for a 30yr refi I am doing through a broker. This was a full, walk through, take pictures appraisal. They wouldn't take it as it was ordered by a broker

Skipping 17 Messages...
Caryite said: Agreed, I did not like the Third Federal policy of them doing another appraisal given I told them I just had one done for a primary mortgage refi. Your experience that they came back with a very low value would tend to explain their interest in doing it themselves, regardless of what you might know otherwise.

Funny, this is the same exact thing that happened to me. It did not matter that I had an appraisal done a few weeks ago on my primary that happened to come in $80,000 more than the one Third Federal was spitting out electronically. They did not care on bit. I filed a complaint against them with bankrate. Not sure if it helped, but I thought someone should know.



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