Of course other credit options open to you include consumer loans, or borrowing money against your credit card. But the greatest disadvantage of all these forms of debt as compared to home equity credit line is that they charge you exorbitant interest rates. On the other hand, a home equity line of credit provides a low cost way of getting extra credit. This type of loan is particularly cost effective as it comes with tax-deductible features, which you would not get with the other types of consumer loans.
There are a number of advantages associated with the home equity line of credit. Here are a few tips to help you best utilize this type of loan:
* Are you badly in debt? The home equity credit line can offer you the best solution in managing your debt and credit situation. You can use the money from this loan to consolidate all your other debts and to repay all these high interest loans. With this type of loan you only have to make a single low interest payment every month.
* Repairing, extension or remodeling of your home is considered to be the best way of utilizing your line of credit. These additional renovations such as making improvements to the kitchen or adding additional amenities to the bathroom not only provides you with short term benefits and conveniences, but also adds long term value to your home. Thus, home equity credit enables you to make long-term investments.
* The cost of higher education is becoming increasingly expensive. In the absence of an education fund it has become nearly impossible to cover this huge expense for your children. For such expenses, the equity value of your home is a valuable aid in getting further funds. You can draw a certain amount on your credit line for a specified period to pay the tuition and other fees to the school or education institution.
* Home equity credit is most useful during times of emergencies, such as medical emergencies in the family. This is the time when you truly appreciate having a home equity line of credit.
jmpoct03
July 26, 2009 at 10:12 am
Wow, with a house that is cash you really should not have that much trouble. Amazing how banks are changing so rapidly.
Keep trying, but maybe ask banks for a 5 year mortgage for the amount you need. They don't advertise this, but banks DO offer short term mortgages, with fixed rates no games.
If you have time go to annualcreditreport.com
and fix anything that is incorrect or outdated if you haven't already done so. Things become outdated after 7 to 8 years.
Also get one credit card, and pay it in full each and ever month for top notch credit. Carrying a balance reduces credit.
Keep trying, there is no reason you should be getting turned down if your house has no mortgage. If you are asking for 20% value they should be throwing it at you.
Try a credit union.
/
mr Smith
July 26, 2009 at 10:42 am
You would need to contact a mortgage broker/banker that do hard money loans.
These hard money loans will allow you to borrow up to 50%-60% of the After Value Repairs ARV) of the property. So based on the appraised value you have you would be eligible for approximately $67,000.
If you only need $30,000 then you are within the limits of what you can borrower.
These type lenders will give you a loan amortized for 30 years but the loan would be due in 5 years, some will make the loan due in 10 years, but this is rare. Your monthly payments would be as if you had a 30 year mortgage loan.
Now by the name of the lender you should know that you are not gonna get the very best rates in the world, but you would accomplish what you want to do and that is build your garage and make other repairs that you think are needed.
These lenders look more at the project (Property) as oppose to the borrower and his credit scores and other things that a conventional lender would look at to include most government underwritten mortgages
In most instances your interest rate on loans are tax deductible on your federal income tax.
For tax and legal matters you should always consult your tax consultant and attorney.
After the five years and your monthly mortgage payments made on time you would be able to refinance your home at the appraised value at that time and you would have your garage built and other repairs done if necessary.
I hope this has been of some use to you, good luck.
"FIGHT ON"
Grant in Florida
July 26, 2009 at 4:35 pm
Yes, you can apply alone. Only your credit will be consider, but also only your income. If that's ok, go ahead. The spouse will still have to sign the disclosures, the mortgage or warranty deed to acknowledge she's aware that property she has some kind of right in is being used as collateral, and the right to cancel.
Mark
July 27, 2009 at 10:00 am
you definitely should have done research before going into any loan with any bank. Most banks are prime- 0.50% and you probably should have looked around for one that didn't charge closing fees…..the good news is, do your research now, wait a few months and pay off this one with a more competitive offer.
lehigh_1999
July 27, 2009 at 2:04 pm
It could be either, but probably good depending on the length of your credit history. If it's an old account that helps your credit. Also your ratio of credit balances to credit limits will increase if you close it, which could increase your score.
inabind
July 27, 2009 at 5:46 pm
A couple of years ago, the equity in your home would've been good enough, but not today. Since no investors want to go near real estate these days, and with homes falling in value daily, the "equity" in a home is relatively unknown. There are millions of people bailing on their mortgages and the lenders are stuck with the houses. They don't want to own houses.
I sold my house last fall. I had it on the market for about 7 months. I was still able to afford it, but I was sick of feeling "house poor" as I wasn't really able to save money, and wasn't able to put enough money aside for future repairs (which is essential if you own a home because things will always go wrong). Selling it was the best thing I've ever done. I'm renting a house of similar size in a nice neighborhood, and it's costing me $1000 less each month than the house I owned! And I bought my house before the bubble.
Today, frankly, your options are limited. An equity loan might be a good deal if you can get it and the interest rate is less than you're already paying. However, if you're already in debt, I can't imagine that an equity loan would help your situation. Worse, if you're not able to pay that loan, you can lose the house, and since you bought it in 1998, you should have a lot of equity in it. Have you considered selling it? I know that the market is not great, but in my area, I've noticed houses selling in about a month. And not owning a house has been a tremendous relief for me. If the roof leaks, I don't have to worry about paying for it! Also, it's better to be in control than have the bank in control. Home ownership is WAY overrated. The mortgage interest these days alone is more than rent, and then there's insurance and taxes on top of that. It's a really bad deal.
bicafo
July 28, 2009 at 1:27 pm
Good if you dont blow it on something stupid. Good if you want to use it to get out of debt. Bad if you buy material things that dont offer a return on investment.
I took one out on my home to pay off my credit cards, and I made sure to pay it off as soon as I was able. I just sold my condo and as a result, took away a nice profit because I didn't owe anythign on my HELOC.
MetalHeart
July 29, 2009 at 4:44 am
check http://www.bankrate.com
justwondering
July 29, 2009 at 6:54 am
Go to your local banker and take a loan on the land and the mobile home as a whole.
Good Luck!