I own my home at about $25,000. I need $ to pay bills. Can I get an equity loan or refinance?

Question

I have a fairly poor credit rating and my bills are slipping. If I own my house, would it be foolish to get a loan on it? What kind of loan can/should I get? Do I need to get it appraised? Please help. :)

Answer 1

i believe you mean that you have $25k equity in that house, yes? that would mean that you purchased with a down payment or not, and in the case of not, it has risen in value since you bought. am i correct? if so, then this is what you do:

1. look at sunday newspapers that have a real estate section in them. or look on the net. get current interest rates and what they charge for "points," meaning one percent of what you borrow. one point of $20,000 is $2,000. but most lenders now are not charging points unless you want to "buy down" your interest rate by 1/8% for one point.

2. find the ones that have very similar interest rates and points.

3. chose them. call them. see if a refinance or equity loan specialist will come to your house to sit down with you and explain all the things you need to know to take the cash equity out of your house now, to pay your bills (a great idea), as well as:

a. how much of that equity would do it?

b. what is your cost to take that money? i.e., the lender should be able to show you how slowly or quickly you recover your fees and costs to get the equity money that you need. i suggest that you take about 20% more than what you believe you need, then put that into a money market account for any future bills that you'd pay with a credit card. try to get to cutting up the credit cards. most people that do what you propose just continue to build up debt again using credit cards and buying brand new cars on credit. those lose 1/3 of the price you paid as "value" as soon as you drive it off the lot.

4. yes, you will have to pay for an appraisal and credit report, which will not look good, but you have equity, so don't fret.

the appraisal will be paid for out of the fees that you pay the lender.

5. ask if there are any closing costs for your refinance or a home equity loan and how quickly you can get the money.

6. you should, if you can, get another sum of money out of what is your minimum amount needed to pay your bills to cover the closing costs, or, you can write them into the loan, but i do not advise that.

7. ask your accountant if in this instance, you can write off loan costs. i do not think you can.

8. ps: if you have owned the house a long time and your interest rate is higher than today's rates, you may consider a total refinance. but get good advice on that, so get a good loan officer with a lot of experience and knowledge.

if you end up refinancing the entire loan, ask about the various mortgage products and what they will cost you. i do not suggest that you take an "ARM" mortgage, PARTICULARLY one with payoff in one year and no cap!!!

if these answers don't help you and you have a specific question, feel free to ask it at the email address specified on my profile.

good luck!!!

Answer 2

Home equity lines are actually harder to get than just straight cash-out refinances. If you the bills you are paying are delinquent, I recommend you check out the source website as they can save you a lot of money. They have a free evaluation form there that takes about 45 seconds to fill out. Good luck.

Answer 3

You can most likely refinance your house--especially if its worth a lot more than 25,000 dollars--its does depend partly on your credit rating and if you have had a steady job for more than 1 year. you will most likely need to get an appraisal unless its obviously worth way more than the amount you need to borrow.

Answer 4

you can get an equity loan. Most companies should be able to find out what your home is worth. You can apply by going to http://www.igotmymoney.com

good luck