Real Estate

Just Refinanced HELOC and Now Sold House

  • Last Updated:
  • May 20th, 2019 9:32 pm
[OP]
Jr. Member
Nov 24, 2006
114 posts

Just Refinanced HELOC and Now Sold House

I have just refinanced (amended) my HELOC to increase the available equity. All paperwork is done however the bank has not yet increased the limit on my HELOC. I also just listed my house for sale, which to my surprise, sold in 12 hours for much more than the asking price. Will the sale, which is still conditional on inspection, affect the increase to my HELOC? When is the bank notified of the sale?

TIA.
12 replies
Deal Addict
Jan 30, 2012
1465 posts
728 upvotes
TORONTO
djv wrote:
May 18th, 2019 1:16 pm
Will the sale, which is still conditional on inspection, affect the increase to my HELOC?
Hmmm. Do you think your Home Equity Line Of Credit will be affected by the fact that you no longer own the home?

With a HELOC, you pledge your home as collateral and borrow against it. The bank files a lien against the house notifying others that they have first dibs on your house if you don't pay your debts. If you don't pay as agreed, the bank can foreclose on your house. As a result, the interest rates on HELOCs tend to be lower than an ordinary line of credit.

If you sell your home, the proceeds first go to pay off the remaining mortgage and HELOC balance (if any). You get the remainder of the proceeds.

If buy a new house, you could set up a new HELOC (or transfer your existing HELOC) with that property.
Deal Addict
User avatar
Mar 9, 2012
2345 posts
1301 upvotes
Kitchener
Not sure if you're serious....the user above ^^^^^^ has the correct answer. No home, no HELOC.
How can we fly like eagles, when we're governed by Turkeys?
[OP]
Jr. Member
Nov 24, 2006
114 posts
I still have the home and the HELOC until the closing date which isn't until end of July so I wouldn't expect any immediate impact to the HELOC unless I misunderstood how they work. I assume HELOC remains active until closing date. Is that not the case?
Deal Fanatic
User avatar
Feb 19, 2010
5907 posts
2623 upvotes
djv wrote:
May 18th, 2019 1:16 pm
I have just refinanced (amended) my HELOC to increase the available equity. All paperwork is done however the bank has not yet increased the limit on my HELOC. I also just listed my house for sale, which to my surprise, sold in 12 hours for much more than the asking price. Will the sale, which is still conditional on inspection, affect the increase to my HELOC? When is the bank notified of the sale?

TIA.
M8Rxmjsik wrote:
May 19th, 2019 6:42 pm
Hmmm. Do you think your Home Equity Line Of Credit will be affected by the fact that you no longer own the home?
:lol: Almost verbatim what I was going to say.

OP also asked how soon the bank will find out that the house is sold. That, in combination with looking for an increase in the available credit, makes you wonder, at least a little bit, what the motives are here.
Sr. Member
May 16, 2017
636 posts
629 upvotes
Yes, the HELOC will remain until closing.
Sr. Member
Jun 13, 2018
539 posts
377 upvotes
djv wrote:
May 19th, 2019 8:15 pm
I still have the home and the HELOC until the closing date which isn't until end of July so I wouldn't expect any immediate impact to the HELOC unless I misunderstood how they work. I assume HELOC remains active until closing date. Is that not the case?
Sure, you could max it out to get a partial payout early if you desire. The bank won't care and all it would cost you is the term interest.
Deal Guru
User avatar
May 8, 2009
10287 posts
6060 upvotes
45.420833°N, 75.69°W
I just saw the thread where OP was worried about not declaring $40 found on the ground...but now this? OP would have got the info from the agreement signed in order to get the HELOC. Barrier of entry to a HELOC agreement is fairly higher than finding cash on the ground.

With the house sale for a rewarding price, why would OP suddenly like to borrow more against the recently sold home? Best to migrate the HELOC to the new property, and assess a limit increase that'd be more beneficial in the long run.
eBay profile| Motorola phone. Linux on 2xcomputers. Brew beer & wine @home.
DUCA thread | Simplii Account Linking | Make CCTS Claim | Max on Koodo Referrals Thread
Sr. Member
User avatar
Jun 6, 2007
972 posts
30 upvotes
Toronto
This guy cant be serious...lol
Stumbled upon RFD by mistake, best mistake of my internet life i must say...... :D
Deal Addict
User avatar
Mar 23, 2003
3434 posts
476 upvotes
Hamilton
titaniumtux wrote:
May 19th, 2019 10:09 pm
I just saw the thread where OP was worried about not declaring $40 found on the ground...but now this? OP would have got the info from the agreement signed in order to get the HELOC. Barrier of entry to a HELOC agreement is fairly higher than finding cash on the ground.

With the house sale for a rewarding price, why would OP suddenly like to borrow more against the recently sold home? Best to migrate the HELOC to the new property, and assess a limit increase that'd be more beneficial in the long run.
One good reason would be to max out the annual payments and lump sum without penalty before the closing to lower your early cancelation of the mortgage VS the interest on the heloc which will most surely be lower.
[OP]
Jr. Member
Nov 24, 2006
114 posts
Some additional, potentially useful details:

1. I do not have a mortgage. I only have this HELOC.
2. Reason for refinancing was due to substantial increase in equity available from the home.
3. Plan is to use this additional equity for the purchase of another home.
Jr. Member
May 7, 2015
143 posts
188 upvotes
Toronto, ON
titaniumtux wrote:
May 19th, 2019 10:09 pm
I just saw the thread where OP was worried about not declaring $40 found on the ground...but now this? OP would have got the info from the agreement signed in order to get the HELOC. Barrier of entry to a HELOC agreement is fairly higher than finding cash on the ground.

With the house sale for a rewarding price, why would OP suddenly like to borrow more against the recently sold home? Best to migrate the HELOC to the new property, and assess a limit increase that'd be more beneficial in the long run.
i just came here to say i like your signature. very helpful stuffs

Top