I'm looking at getting this through Standard Federal (
http://www.standardfederalbank.com/l...ome_lines.html)
It says there's no closing costs, no applications fees, nothing, but in the "fine print" section it just explains the APR as being 3.5% to 7.25%. The ONLY thing there that I don't understand is the line about a balloon payment.
Here's the "fine print"
Quote:
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The Annual Percentage Rates (APRs) on Standard Federal Bank's Home Equity Lines of Credit are tied to Prime. Prime is the highest Prime Rate as published in the "Money Rates" section of The Wall Street Journal on the last publishing day of the calendar month immediately preceding the billing cycle. The margin tied to Prime varies and depends on the approved credit line amount and product. On 7/30/04, Prime was 4.25% and the APR on Standard Federal Bank's Home Equity Line of Credit products varied between 3.50% and 7.25%. Prime is a variable rate; as it changes, the APR on your account will change. The maximum APR is 21%. A balloon payment will result at the end of the ten-year draw period. The Home Equity Lines are limited to owner-occupied, 1-4 family principal residences and are subject to no less than a second lien position on your property. You must carry insurance on the property that secures this loan. Flood insurance required if necessary. There is a $50 annual fee after the first year unless you are a member of Credit Exclusives. Consult your tax advisor concerning the deductibility of interest. Closing costs paid by Standard Federal Bank are limited to: appraisal, title insurance, flood certification and recording fees. Any additional fees or conditions imposed by the city, state or county that the subject property is located in will be the borrower's responsibility. The APRs are subject to change without notice.
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Does that mean it's 3.5% - 7.25% interest PLUS the prime? So in other words, as little as 7.75%, but as much as 12.25%? (I guess either way, it's better than paying the credit card interest rates)