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Unique Laws for HELOCs in Missouri

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1. Missouri’s No Prepayment Penalty Rule

Missouri law prohibits lenders from charging prepayment penalties on HELOCs. That means if you decide to pay off your HELOC early, you won’t face any extra fees.

2. Loan-to-Value (LTV) Requirements

In Missouri, lenders typically allow homeowners to borrow up to 90% of their home’s value, minus the amount they still owe on their mortgage. For example, if your home is worth $300,000 and you owe $200,000, you might qualify to borrow up to $70,000.

3. Second Mortgage Priority

A HELOC is considered a second mortgage. Missouri lenders require your primary mortgage to remain in first lien position. This means the lender for your HELOC takes a backseat if foreclosure occurs.

4. Homeowner Protections

Missouri homeowners benefit from laws that require clear disclosures during the HELOC application process. Lenders must provide a clear breakdown of fees, interest rates, and repayment terms.

5. Property Tax Considerations

If you’re using your HELOC for home improvements, keep track of receipts. Missouri allows certain tax deductions for home improvement projects funded through equity loans.

Pro Tip: Always consult with a local mortgage expert who understands Missouri’s unique rules. It’ll save you time, money, and potential headaches.


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