July 5, 2007

Same Bank for the HELOC

Even though I'm a mortgage broker and can get HELOCs for my clients, I prefer to do the right thing and make it more convenient by referring them to the bank they are current hold their checking accout with. Why do this? Well, let's look at the benefits:

1) Most banks have no closing cost HELOCs. This means the bank will pay all the closing costs on the HELOC for the client, which basically gives them a free loan. I would have to charge them a fee to do this, so why not let them get it for free.

2) Bank can bend the rules. Most banks will bend the rules for a client if they have a current banking relationship, so people who I normally couldn't get a HELOC for have a better chance if they go straight to their bank.

3) Online banking is easier. Most banks have online banking and with both the checking account and HELOC at the same bank it makes it faster and easier for the client to transfer their money to their HELOC rather then sending away a check.

4) Bank close faster. I have a loan officer over at Wachovia who closes my client's HELOC in a matter of 5 bsuiness days. I usually takes me 2 weeks to do this, so why hold up the client?

5) Better rates. Most banks will give a client .25% to .50% off their HELOC rate if they have a checking account. I know Bank of America just gave one of my clients .50% off their HELOC because they have a checking account with them.

When you look at all the benefits of sending the client to the bank they current have their checking account with to get the HELOC, it is a no-brainer. I could sit here and try to get the clients the HELOCs myself, but I would be doing them more harm then good. So, if you are a loan officer reading this, do the right thing for your clients and refer them to their bank for the HELOC.

A happier client will refer you more business then a pissed off one.