I own my own house. I have no prior mortgage I bought it cheap and I fixed it myself. Its probably worth?

Question

Probably worth between 50,000 - 100,000. I want to get a loan out using my house. How does this work. My credit is horrible. Will I be able to do this. I only want about $20,000. I owned the house for over 8 years

Answer 1

Just a point... Your credit is horrible and when you take out a mortgage (or a Home Equity Line of Credit - HELOC) the asset the loan is based on is your HOUSE. If you miss payments, etc., you put YOUR HOUSE at risk!

Now if the money you are taking out will clear up your credit situation, then it might be a good idea.

Because your loan to value will be between 20 and 40 percent, that will help reduce the sting of the interest rate you will pay due to your bad credit.

good luck!

Answer 2

You have various options if you own the house clear. Your bad credit will affect all your options, since you will not get the best interest rates for any loan. (As a side note, even your auto insurance rates are affected by your credit rating.)
Because you have 100% of equity in your home, you could get an conventional mortage loan for up to 80% of equity ($80K if your house is worth $100K) with existing rates below 6%.
The most practical loan, considering you only want $20K, would be an equity line of credit (against your equity in the house you own). This is normally at higher rates (I just saw an offer at less than 7%) but with less expense up front; plus the advantage of paying only for the amount you use or need, while retaining access to additional funds. This is a great option if you are disciplined in the use of the available line of credit. It sould be used to pay off more expensive debt such as credit cards.

Answer 3

Walk into your neighborhood bank where you have an account and ask for a homequity line of credit.

Answer 4

mortgage..second mortgage.home improvement loan.take your pik