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papacraner
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HELOC OR Loan  Reply with quote  

I really need to tap some cash for much needed home improvements and a few other issues. My credit score today is 603. I owe $ 67,000 on a home worth $ 130,000, household income is approx $ 63,000/yr. With loan requirements so strict today should I even bother applying for a HELOC or loan.....and if it's not impossible for me to be approved...where?

Appreciate any input......oh....I did just refi my mortgage from 6.75% to 3.75%.

Thanks
Post Thu Jun 13, 2013 7:55 pm
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papacraner
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9 views..no advice? Sad
Post Thu Jun 13, 2013 8:50 pm
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littleroc02us
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Why is a rehab necessary would be my first question. As for the advice I would give you, I don't borrow money, except for a mortgage so I'm not the going further into debt guy you want to speak with. If the rehabs can wait and the it isn't an emergency how long would it take you to cash flow the projects?
As for being approved, the banks won't approve you because of the low credit score. Why is it so low?

By the way 3.75% is a great rate.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Thu Jun 13, 2013 9:09 pm
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papacraner
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Thanks for the reply. My roof is 27 yrs old and shingles flying off.....would like to give my wife a remodeled kitchen, she deserves it. Smile

Why so low? Simple.....we haven't managed our money correctly for the 31 yrs we've been married. Both our faults...and just when we think we're gonna get our finances straight problems concerning a daughters family cost us about $8000 the last few yrs.

If they approved me for a refi, why not a HELOC when I have good enough equity ? See I dont want to try for one and be denied, having my score fall more because of someone looking into my credit.
Post Thu Jun 13, 2013 9:42 pm
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clydewolf
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Re: HELOC OR Loan  Reply with quote  

quote:
Originally posted by papacraner
I really need to tap some cash for much needed home improvements and a few other issues. My credit score today is 603. I owe $ 67,000 on a home worth $ 130,000, household income is approx $ 63,000/yr. With loan requirements so strict today should I even bother applying for a HELOC or loan.....and if it's not impossible for me to be approved...where?

Appreciate any input......oh....I did just refi my mortgage from 6.75% to 3.75%.

Thanks

Home improvements sounds more like a want than a need.

Littleroc02us asked the right questions:
- Why the low credit score?
- How long would it take to save up the cash for the home improvements?

In your budget you should have a line for repairs, and another line for improvements. This allows for saving for both items and helps to avoid such loans.

What would the payments be for the loan? Start today to save that amount each month for your home improvements.

Become your own lender.
Post Fri Jun 14, 2013 1:29 am
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coaster
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quote:
Originally posted by papacraner
9 views..no advice?

Technically speaking, we don't give advice here. All posts are viewpoints and opinions expressed in discussion format. We hope in the discussion some wisdom and knowledge will be imparted that you might find useful in making your own decisions, but we cannot actually advise you what to do.

Personally, I like the phrase expressed above: "become your own lender" Wink

~Tim~
Post Fri Jun 14, 2013 4:42 am
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oldguy
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quote:
Thanks for the reply. My roof is 27 yrs old and shingles flying off..would like to give my wife a remodeled kitchen, she deserves it...
Why so low? Simple.....we haven't managed our money correctly for the 31 yrs .


Have you noticed that many TV commercials use the phrase "you deserve it"? It make people feel entitled, reward yourselves, etc. And it is part of the reason why so many people fail financially, ie they fall for those commercials.

It sounds like you have been spending on 'wants' rather than 'needs' over the past 31 yrs.
I would replace the roof, that is a need to protect your house from damage. And a new kitchen is a 'want', I would start a savings account for that and pay cash when you have the money.

How are you fixed otherwise - you are getting closer to retirement, a 401K? Pension? SS pension? Cars? Do you have some 'toys' that you could sell?
Post Fri Jun 14, 2013 3:30 pm
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papacraner
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Thanks for the replies. Good advice....sadly I JUST started a " rainyday " fund last month putting away $100/month. Its taken me a long time and many many bad decisions to " mature " financially. Seeing these type of commercials on TV along with so many debt related ads I think my circumstance is a common one.....and you " smart " folks the exception.

All that being said people do use HELOC/loans for things like this and was just throwing my circumstances out there to see if I should even bother to try....yes, just opinions of course.

One of my children ( 29 ) is in dire circumstances with 5 kids and I feel pressed to help ....thats another issue. She's cost my wife and I a lot of money over the last few yrs already ..but they're our grandkids.
Post Fri Jun 14, 2013 3:45 pm
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littleroc02us
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Actually for me I've had to do all of the dumb things first and then learn from them. I guess that's how God makes me learn things, but in the end I'm way better off and can give my wisdom to others before they make the same mistakes.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Fri Jun 14, 2013 4:01 pm
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oldguy
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quote:
Seeing these type of commercials on TV along with so many debt related ads I think my circumstance is a common one


lol - You are probably right - I blame the dumbing-down of the K-12 schools 30 years ago, taking mathematics out of our schools was a mistake that is now hurting lots of people.

quote:
One of my children ( 29 ) is in dire circumstances with 5 kids and I feel pressed to help


Yeah, I know the drill, we have adult daughters too. But make certain that you are helping, not enabling. And remember, when you are elderly, broke, and don't remember anyone your kids will be forced to support you - try to prevent that if you can. Any time you spend $10,000 on your child now, that is $10,000 that WON'T be in your bank account when you are age 80.

Your $63k salary probably nets about $44k after taxes. And your house payment is about $7000/yr. So you have $37k for everything else (that's about $100/day, it slips away pretty easily). So you can't just pop for a $15,000 kitchen, $10,000 to help a kid, etc. And borrowing just makes it worse - eg, if you borrow $15k for a kitchen it will cost you $22,000 to repay - and it puts your house at risk, miss a few HELOC payments and the bank will want that house.

BTW, good mortgage rate. Your payments are $125/m to $175/m lower. Which raises a question - why only $100/m going to the rainy day account? Very Happy
Post Fri Jun 14, 2013 4:13 pm
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Zhr
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If I were you I would apply without questioning. Unfortunately you are not going to have a complete answer here because it is not a common situation, try applying, nothing to lose...

And hay Smile, can you update us with what happen with you?

Thanks
Post Fri Jul 05, 2013 6:17 am
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hotelmountain
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Hi, i got such a nice information from your thread on loan services and thanks for consideration to us.
Post Mon Aug 12, 2013 11:03 am
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norrisgallagher45
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HELOC stands for "home equity line of credit." Equity is the current appraised value of a home, minus that amount still owed on the mortgage. As a home appreciates in value from the price the homeowner financed to get it in the beginning, more and more equity is built up. HELOC Christian loans allow a homeowner to borrow from this equity, putting the home up as collateral in case the money is not repaid.
Post Tue Aug 20, 2013 9:45 am
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