Answers
I'm thinking about applying for a home equity loan or line of credit for my home but am discouraged by my below average credit score. To refinance, any and all applicants must also be on the title document, so would the same rules apply on a home equity loan or line of credit?
Anyone cosigning for something such as that would have to be on the deed to qualify. Otherwise is is not a home equity loan but a personal loan.
A home equity loan and a home equity line of credit both provide money from the value of your home. But each one has its pros and cons.
I just had a house built this year, I have been living there since April 7th 2009. My home has some equity already because I built this on my own property, it is appraised at 500,000, I took out a mortgage for 245,000. My question is, can I apply for a home euity line of credit or do I have to live there for a couple of years first?
I think you can apply for one anytime you want. Since you have substantial equity in the house, there will probably be no problem.
anything?
No! application fees and any other fees should be paid in escorw. Usually fees are deducted from the loan proceeds, and very rarely is it an out of pocket expense for borrowers (unless you agree to pay for closing cost), in which case you advance the funds in your escrow account and the escrow officer is the one in charge of disbursing funds at close.
Whats the difference between a loan and a line of credit?
Do you think its ok to search for the lender on the internet or should I go to my bank who refused it 2 yrs ago even though my FICO score was over 700? Its 760 now.
Do most people get quotes for the work they need or do they just borrow over and beyond what they think they need?
What are they going to ask me for when I apply for the equity line of credit?
#1 - A loan is a one time amount of money lent to you. Once it's paid off, it's done. A line of credit is a revolving credit amount where once ou pay the amount owed of, you can use the credit again (just like a credit card).
#2 - It is best to either search online or find a mortgage/loan broker. A broker has far more access to different companies that might have different lending requirements so if you were declined by one place, they will be able to shop it to another.
#3 - If you get a loan, it might be required or at least a good idea to get a quote for the work that is being done. There's no point in borrowing money and paying interest on it, just for the sake of having some extra cash around. If you are taking a line of credit, don't worry about the reciepts...you are only charged interest on the amount that you spend on it, not the amount available.
#4 - They will ask you more or less the same questions whether it's line of credit or a loan, however, they are alittle more strict with lines of credit, becuase you need to be responsible for a longer period of time instead of just the duration of one loan term.
If you have good credit (i.e. a score of 640 and above), it may prove beneficial. HELOC rates are generally lower then credit card rates. Also, the interest on the HELOC is tax deductible if you already itemize your deductions (which most homeowners do). The IRS doesn't permit citizens to deduct interest paid on credit cards. Having said this, you may want to make sure that you still have equity in your house given the current state of the real-estate market.
Once your credit cards are paid off, you should cut them up and throw them away. Avoid carrying credit card debt at all costs. As far as I'm concerned, there are only three things that are worth borrowing for:
(1) College education
(2) House (only if you can afford the monthly payments - part of which should be contributed to the principle)
(3) Car
Get Cash In On Cash-Out Mortgage Refinance Program - PcQL Article
It is a mortgage refinance transaction wherein the new loan amount is more than the existing mortgage amount, including the closing costs. Usually, the main purpose of a cash-out refinance is to extract equity from the house. It acts as an alternative to a home equity loan. It has become a popular method for borrowers to pay back credit card debts, or meet added expenses.
There are two ways to carry out cash-out mortgage refinancing . One is as HELOC - Home Equity Line Of Credit. That is, a line of credit is extended to a homeowner that uses the house as collateral. Once a maximum loan balance is reached, the homeowner may withdraw on the line of credit at his/...
News
Credit crunch: Home equity lending evaporatesChicago Sun-Times - Dec 29, 2009
He planned to pay for the project with his $200000 home equity line of credit, which he took out in January 2007 when his house was valued at $750000. and more »Philadelphia Inquirer - Dec 28, 2009
What Harry says: It would have been easier to get a home-equity line of credit (HELOC), and it's not too late to try. You would have fewer fees and you and more »Examiner.com - Dec 29, 2009
For those of you with a Home Equity Line of Credit (HELOC) this is an opportune moment to create a strategy about how to handle it.Wall Street Journal - Dec 29, 2009
"The banks have really tightened up, so it's harder and harder to get a home-equity line of credit," Mr. Richardson says. "If you don't budget for repairs, and more »Wall Street Journal - Dec 22, 2009
The Business AgeConsumer delinquencies for credit cards, first mortgages and home-equity lines of credit increased again in November from the month earlier, Equifax Data Show U.S. Consumer Payment Trends Continue to Deteriorateall 28 news articles »
Bankrate.com - Dec 25, 2009
Rates on home equity products fell sharply this week. The average home equity line of credit, or HELOC, slipped 6 basis points, to 5.54 percent, and more »
Philadelphia Inquirer - Dec 25, 2009
Consumers leveraged their income to get credit cards and car loans, then leveraged home equity to pay off growing piles of debt. As we now know, and more »