Is it wise to apply for a Home Equity Loan from the same lender as your Mortgage Loan?

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Or is it better to search for other lenders? I often hear that if you apply a loan with the same lender whom you already have a loan with; your interest rate will always be higher than if you were to shop around & go with another lender?

I just seen a case where a judge did exactly that. Is this legal? Why? The Bank is appealing his ruling. What do you think of this?

19 Comments
  1. Reply
    DJ B
    February 19, 2011 at 4:06 pm

    While that may be true, if you shop around you may have upfront fees and qualifying requirements that your current lender probably wouldn’t ask for.

  2. Reply
    marxistharpist
    February 19, 2011 at 4:38 pm

    On a second lien, the rate is always higher, because it is a riskier position, this is regardless of lender. You might want to look at refinancing the first mortgage and getting the cash that way. Here is what you do, get quotes for the home equity loan and than check the blended rate with your first mortgage. If you can get a refinance done with a better rate than that blended rate than go with the refi. Always shop around, because it gives you more options.

  3. Reply
    Mortgageman
    February 19, 2011 at 5:07 pm

    I don’t believe that to be true. Your current lender should want your business as much as the next guy.

  4. Reply
    flamingojohn
    February 19, 2011 at 5:11 pm

    With a HELOC you are almost always best served to go to your local bank where you do your normal checking and savings. They will typically do a HELOC for no cost and at the lowest rates. If you go to a broker- and I am one- we don’t make much money on HELOCS so we have to charge you higher points to make any money on them. That has to be worth something if a broker is telling you to go to the local bank…

  5. Reply
    just4success
    February 19, 2011 at 5:41 pm

    if you got your first loan as a result of filtering out the best from other available loan products for you, then there’s a great chance that getting their services again would be best for you.. if it was a direct lender, your best bet might be a mortgage broker who can search the lowest/best loan package based on your circumstances and qualifications.. there’s one i highly recommend as a good find and do business in 46 states –

  6. Reply
    Beverly S
    February 19, 2011 at 5:48 pm

    Need more details. Unless it was fraud though NO they can’t. A contract is a contract & if you borrow money & don’t pay it back you don’t keep the house.

  7. Reply
    Jean Luc Picard
    February 19, 2011 at 6:16 pm

    i think its about time…since the legislators wont protect the consumer, the judiciary has to

  8. Reply
    Henry C
    February 19, 2011 at 7:14 pm

    i know what article you’re talking about. he wiped the $ 500,000 slate clean, right? yeah he’s just helping the people stall. their home is getting repossessed and they’re going through a lot of sh*t. it’s just a stall.

  9. Reply
    rotorhead
    February 19, 2011 at 7:20 pm

    Judges can do anything. They are gods.

    Well, only the Liberal judges.

    Conservative judges are Satan.

  10. Reply
    U R Sofa King
    February 19, 2011 at 7:43 pm

    Yes, if the lien holder cannot show proof of holding the note, then they cannot take claim to a debt they have no proof of owning. this is an apparent issue especially with mortgages that have been sold many times to other servicers, or mishandling on the part of the title company.
    also a lien strip can remove a lien from a property.

  11. Reply
    Abby Normal
    February 19, 2011 at 8:35 pm

    There may be some very specific instances where the note or mortgage were not properly executed where a judge could rule that it was not a valid lien. The borrower would still be responsible for repayment, but the debt would no longer be secured by the home. It would become unsecured debt – like a credit card or personal loan.

  12. Reply
    rickinnocal
    February 19, 2011 at 9:30 pm

    It’s a good question, and one that’s going to end up in the Supreme Court fairly soon, since Obama’s package gave the bankruptcy courts the power to do this.

    The Constitution says:
    (Article 1, Section 10) :
    “Section 10. No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or **law impairing the obligation of contracts**, or grant any title of nobility.” (emphasis mine)

    This would certainly forbid a *State* from passing a law that allows a judge to void a mortgage, but in this case it’s the *Federal* Gov’t that is doing so.

    The various banks that are fighting these cases are making the claim that the Constitution does not specifically give the government the power to void a contract between private parties, and that they therefore do not have that power. A strict reading of the Constitution would support that argument – but the Supreme Court has not restricted itself to the strict language of the Constitution for decades.

    Richard

  13. Reply
    Candy Cane©
    February 19, 2011 at 10:04 pm

    It’s B.S….You really want the government to be able to legally cancel contracts? Think about it. The government is the reason that people bought houses that they cannot afford, with no proof of income and no credit. Now, they are punishing the banks for trying to collect their money. The whole think is messed up.

  14. Reply
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  19. Reply
    Loan One Mortgage
    February 20, 2011 at 2:04 am

    You may wish to find a better lawyer. In certain cases if your house is worth far much less then amount owe the loan can be considered “un-secured” and in a Bankruptcy filing it could be discharged and the home owned free and clear…. I am not an attorney, nor claim any legal expertise…

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