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Barrister, Attorney
Category: General
Satisfied Customers: 33176
Experience:  15 years practicing attorney, Realtor, 26 years landlord
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I have a $200k equity line with chase and owe $125k on it.

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I have a $200k equity line with chase and owe $125k on it. Right now it is at 3%. I have the option to lock the balance and it looks if rates might be rising. It seems like a slam dunk but I'm worried that there might be a catch. What are the pitfalls of locking the current balance at 3%?
Hello and thank you for using JA! My goal is to provide you with excellent service and help with your legal problem.
I would tend to agree with you that rates have probably hit bottom and will only slowly rise from here. So the only realistic downside of locking now would be if rates were to somehow drop again due to some unforseen calamity and fall below 3%.
But if it were me, I would be willing to roll the dice that that wasn't going to happen and go ahead and lock now because when rates jump, they can jump quickly and can rise a half point in a day if good financial news comes out.







If you need further help, just reply to me via the “REPLY” button and I will be happy to continue.


I cannot enter into an attorney client relationship, this is a public forum, and all posts are available for public viewing. There is no duty of confidentiality that attaches to any posts. The information provided is not a substitute for a local attorney’s legal advice.

Customer: replied 3 years ago.
Thanks. I've sort of come to the same conclusions but I'm worried that there may be a catch that I'm not aware of especially since it's Chase bank that we're talking about. I'm wary that there may be some hidden fee or penalty.

I would like to know if you have direct knowledge of how the loan locking procedure works and that there are no penalties or restrictions imposed on my future use of the line. If not, I should probably re-ask the question. I appreciate your response but it is information that I already have.
Now, as to fees or costs, I couldn't comment. You would have to check your contract to see if there is some catch. Typically there is some kind of "lock in fee" but that is usually all that there is.
I haven't actually locked any of my equity lines, but I have inquired about it as well and as I understand it, basically that converts it to a standard loan amortized over whatever term your contract says. So if you have a $100K equity line and you lock $75K, that drops your line to $25K because whatever you are using as collateral for the line now has a fixed $75K already borrowed against it.
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