If you are thinking of converting your variable Home Equity Loan

[question everything]

to fixed rate one, beware!

I have been dealing with two banks and two loans and they are really devising ways to get extra interest for which they either did not state, of course or, they are not entitled.

If you are taking this conversion, which will also have a variable part available if needed, make sure that that additional funds are not being sent to you as a cashier check with variable interest, of course! Make sure that the additional available amount is just that - available if needed!

Don't let more than 30 days pass between the time you signed the papers and the date your first payment is due. In contrast to a regular "closed-end" mortgage loan, interest starts accrued immediately and if you are sending the minimum amount, it will not be enough to pay for both principal and interest. It will take several months before you will see some of that amount applied to principal.

I have been sending extra for several months now and they are still playing games. My next step - if they do not do the right thing - will be a complaint to the state AG. They are collecting interest for which they are not entitled, just because their computers are programed this way.

There! I am feeling better now! Just had two very angry talks with two managers in two banks. I think that one is resolved, but will have to wait for the statements.

[Tellurian]

1. Better to...

Take the "Bull by the Horns" and call your state Banking Commission and report the mismanagement of your account. Then find another lender asap and refinance your loan.

I am a loan officer and what you are describing as treatment by the lender of your loan is not only unacceptable behavior but also illegal.

[question everything]

2. Thank you. This is what I think

Since I did express these sentiments to the manager and he promised to look at my account, I will give him 24 hours.

But you are right that someone needs to be aware of it. I cannot be the only one who sends extra money.

[Tellurian]

3. Your welcome...

what you are describing is called a HELOC=Home Equity Line of Credit. Usually a lender will have you take out a minimum of $25/$30K and require a set amount to be cashed out at closing (say $10K)You can then redeposit the money in your checking account but that is their way of collecting interest on their money the minute your loan is closed. There is also an Option Arm, where you have 4 choices of how you prefer to repay your loan each and every month. (1)nominal-payment, (2)adj.interest only, (3) principle+interest (4)choose to fix the rate for 30/40 yrs. The caveat here is, the pmt only choice can result in negative amortization of the equity of your home. So, make the system work for you-and you not work for it.. I'll shut up now!

:CHEERS: :hi: