What are the costs of obtaining a home equity line of credit?
Many of the costs in setting up a home equity line of credit are similar to those you pay when you buy a home. For example these fees may be charged: • A fee for a property appraisal, which estimates the value of your home • An application fee, which may not be refundable if you are turned down for credit • Up-front charges, such as one or more points (one point equals one percent of the credit limit) • Other closing costs, which include fees for attorneys, title search, mortgage preparation and filing, property and title insurance, as well as taxes • Yearly membership or maintenance fees You also may be charged a transaction fee every time you draw on the credit line.
A. Many of the costs in setting up a home equity line of credit are similar to those you pay when you buy a home. For example, these fees may be charged: • A fee for a property appraisal, which estimates the value of your home; • An application fee, which may not be refundable if you are turned down for credit; • Up-front charges, such as one or more points (one point equals one percent of the credit limit); • Other closing costs, which include fees for attorneys, title search, mortgage preparation and filing, property and title insurance, as well as taxes; and • Yearly membership or maintenance fees. You also may be charged a transaction fee every time you draw on the credit line. You could find yourself paying hundreds of dollars to establish the plan. If you were to draw only a small amount against your credit line, those charges and closing costs would substantially increase the cost of the funds borrowed. On the other hand, the lender’s risk is lower than for other forms of credit
Many of the costs in setting up a home equity line of credit are similar to those you pay when you buy a home. For example, these fees may be charged: • A fee for a property appraisal, which estimates the value of your home • An application fee, which may not be refundable if you are turned down for credit • Up-front charges, such as one or more points (one point equals one percent of the credit limit) • Other closing costs, which include fees for attorneys, title search, mortgage preparation and filing, property and title insurance, as well as taxes • Yearly membership or maintenance fees You also may be charged a transaction fee every time you draw on the credit line. You could find yourself paying hundreds of dollars to establish the plan. If you were to draw only a small amount against your credit line, those charges and closing costs would substantially increase the cost of the funds borrowed. On the other hand, the lender’s risk is lower than for other forms of credit because you
