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TLDR: Customer wants me to tell her what to do.
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Customer wants a $24,000 home equity line of credit to consolidate 17k of debt and have some extra available for medical bills/emergencies. She and her husband are both retired and still have 12 years left on their 1st mortgage, so are a bit uncertain about the idea of putting more money on their house. The line of credit is also a variable rate, but so is 14k of that 17k in debt, and the credit cards are double the rate right now.
So, I end up spending an hour on the phone with customer to go over the home equity line of credit, compare it to what she has already, etc. Let her know the happy news that I can waive the appraisal for her also, so yay. She gives me the go ahead, and I start the title search/processing.
1 day in. Customer wants to increase limit to 25k instead of 24k. NP, but I warn her that 25k is the maximum I can do for her with a waived appraisal. Any higher amount, and I'll have to charge an appraisal. I get proof of income, remind customer that I need home insurance.
3 days in. Customer is nervous again about the variable rate. Spend another 45 minutes going over the loan. Customer decides to continue as is.
7 days in (due to weekend). Title search results come in. Call customer to remind her that I need verification of insurance. I have everything else, so once I get verification of insurance, I can schedule a closing appointment. Yay for waived appraisals and quick processing! Customer wants to increase amount to 26k. Remind customer that I would need to do an appraisal for any amount over 25k.
8 days in. Customer not certain about the variable rate. I'm not certain about a line of credit on this customer's home because her credit cards are all maxed out and imo she'll max out the line of credit and pay interest only for 15 years, then get hit with the balloon without expecting it despite this being the 3rd 45+ minute talk we've had over this now. Customer wants me to tell her what to do. I resist as I do not tell customers what to do, I go over pros and cons and leave the decision up to them.
9 days in. Customer decides to switch to the fixed term, fixed rate home equity loan. 15 year term to keep the payments low. Rate is higher at that term, but fixed, and still better than the credit cards (though not by nearly as much.. her credit card rates aren't bad). I send out new disclosures for the fixed term loan.
11 days in. Customer wants to know "is she doing the right thing". I go over options with her, but I cannot make the decision for her. In particular, I go over (again) the extra funds she is getting, "just in case". That is something that makes more sense for the line of credit as it can be available without the customer ever actually using it or being charged interest on it. Customer has me go over difference between line of credit and fixed term loan again (1st one is like a credit card, 2nd one is like a cash-out auto loan). 45 minutes later, she decides to reduce the home equity loan to 20k... then changes her mind...then says yes, reduce to 20k and take the term to 10-years for a lower rate... then no, don't do anything.
11 days in reprised. Customer wants me to tell her if it would be better to refinance her first mortgage and add in the extra money. I cannot answer this question as I do not know the rate she would qualify for on a 1st mortgage (cash out makes the rate higher) or what the exact fees would be. Customer wants me to explain the difference between a first and second mortgage, while not understanding every other line. Finally, customer has me get her in touch with 1st mortgages to look into refinancing her 1st mortgage with cash out to pay off the extra 17k in debt and maybe emergency funds. (Edited to add: customer spoke to 1st mortgages before putting in home equity application. They set her to me to start with.) Home equity loan is on hold.
Maybe.
11 days in was this past Friday. We'll see what comes up Tuesday.
*sigh*
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Customer wants a $24,000 home equity line of credit to consolidate 17k of debt and have some extra available for medical bills/emergencies. She and her husband are both retired and still have 12 years left on their 1st mortgage, so are a bit uncertain about the idea of putting more money on their house. The line of credit is also a variable rate, but so is 14k of that 17k in debt, and the credit cards are double the rate right now.
So, I end up spending an hour on the phone with customer to go over the home equity line of credit, compare it to what she has already, etc. Let her know the happy news that I can waive the appraisal for her also, so yay. She gives me the go ahead, and I start the title search/processing.
1 day in. Customer wants to increase limit to 25k instead of 24k. NP, but I warn her that 25k is the maximum I can do for her with a waived appraisal. Any higher amount, and I'll have to charge an appraisal. I get proof of income, remind customer that I need home insurance.
3 days in. Customer is nervous again about the variable rate. Spend another 45 minutes going over the loan. Customer decides to continue as is.
7 days in (due to weekend). Title search results come in. Call customer to remind her that I need verification of insurance. I have everything else, so once I get verification of insurance, I can schedule a closing appointment. Yay for waived appraisals and quick processing! Customer wants to increase amount to 26k. Remind customer that I would need to do an appraisal for any amount over 25k.
8 days in. Customer not certain about the variable rate. I'm not certain about a line of credit on this customer's home because her credit cards are all maxed out and imo she'll max out the line of credit and pay interest only for 15 years, then get hit with the balloon without expecting it despite this being the 3rd 45+ minute talk we've had over this now. Customer wants me to tell her what to do. I resist as I do not tell customers what to do, I go over pros and cons and leave the decision up to them.
9 days in. Customer decides to switch to the fixed term, fixed rate home equity loan. 15 year term to keep the payments low. Rate is higher at that term, but fixed, and still better than the credit cards (though not by nearly as much.. her credit card rates aren't bad). I send out new disclosures for the fixed term loan.
11 days in. Customer wants to know "is she doing the right thing". I go over options with her, but I cannot make the decision for her. In particular, I go over (again) the extra funds she is getting, "just in case". That is something that makes more sense for the line of credit as it can be available without the customer ever actually using it or being charged interest on it. Customer has me go over difference between line of credit and fixed term loan again (1st one is like a credit card, 2nd one is like a cash-out auto loan). 45 minutes later, she decides to reduce the home equity loan to 20k... then changes her mind...then says yes, reduce to 20k and take the term to 10-years for a lower rate... then no, don't do anything.
11 days in reprised. Customer wants me to tell her if it would be better to refinance her first mortgage and add in the extra money. I cannot answer this question as I do not know the rate she would qualify for on a 1st mortgage (cash out makes the rate higher) or what the exact fees would be. Customer wants me to explain the difference between a first and second mortgage, while not understanding every other line. Finally, customer has me get her in touch with 1st mortgages to look into refinancing her 1st mortgage with cash out to pay off the extra 17k in debt and maybe emergency funds. (Edited to add: customer spoke to 1st mortgages before putting in home equity application. They set her to me to start with.) Home equity loan is on hold.
Maybe.
11 days in was this past Friday. We'll see what comes up Tuesday.
*sigh*
But OMG does this woman not have a family member or close friend who can say "Here's what I would do in your circumstances" -- unlike bankworking, who CANNOT advise her on "what I should do."
Customer, we're looking at 10 and 15 year options. You have about 12-13 years remaining on your current 1st mortgage. Refinancing to a 30 year and ONLY saving $20 a month makes no sense. I suspect I have bad numbers given to me somewhere. Maybe the terms of her existing 1st mortgage are better than she believes, which would make it even more likely that leaving her first mortgage alone and going with the home equity is probably the better option. 
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