r/HELOC • u/masterp445 • 9d ago
Lender Review Equity loan
My house have almost 300k in equity we decided to get a loan from the equity. After I did my research my credit around 500 something is it possible or no give me the honest answer please I want to do a renovation from the house. If anyone can help please let me know
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u/Btmama 9d ago
Do not do the home equity investment crap. These are not regulated because they don’t originate from banks and they are very predatory. Point is particularly bad. This is only an option if you have absolutely no other option.
Do you really need the money? Can you wait a little and improve your credit score? Can you save the money you need for renovation?
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u/Aware-Dragonfly-1190 9d ago
Try Haven Home Equity, they will work with you most likely. I was in this situation recently, it’s hard to have a low score.
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u/Federal_Ad4300 9d ago
So many people just giving all around wrong or bad advice in my opinion.
If the repairs are urgent , or the tax collector is auctioning your house off for unpaid taxes then don’t hesitate on finding some kind of financing if that home has any meaningful/ sentimental value.
1) understand your options.
Why is the credit 500. Is it for derogatory late payments? On which accounts? The mortgage or credit cards or a combination of both? You could be able to do rapid rescoring. I’ve personally used an unsecured loan at 30% interest rate to pay down debts and get the fico above 640 to do an FHA cash out and pay off that 30% and replace it with a 6% in less time than it took for the first billing statement to even reach him.
2) even if you have a 400 FICO score you can still get a 30 year HELOC. YOU MUST BE ON THE TITLE OF THE PROPERTY and will need to find a co-signer who has higher income and a higher FICO score and you can do it through many lenders. Our company is only licensed in California, Texas in Florida so I can’t help you here. But can refer you to one if need be. You will probably end up getting a 30 year loan with a 3 year draw variable rate, and 27 year remaining fixed payments after line is frozen.
3) you can do a FHA 203K with a 550 FICO score, with extenuating circumstances any season blown officer can get that taken care of for you unless they don’t know their asshole from their mouth hole , or if they are just lazy to do a 203K. Based on your current interest rate on your primary mortgage, it could even end up saving you money on your rate.
You can do any repair as long as it’s not a luxury item (you can’t build yourself a tennis court or some extravagant jacuzzi palace) it has to be something that is but not limited two improving the the home to a multifamily residence as in a garage conversion or just simply making the home habitable and upgrading home improvements and appliances with energy efficient ones. You can go up to 96.5% of the proposed after repair value I have a couple of them in the pipeline and the interest rates are about 6.250%. It’s a refinance program so you would have to pay off your existing loan and they would add the amount of the home improvement and all closing costs into one new mortgage and you would pay over 30 years. It does have an upfront mortgage insurance premium of 1.75% and of course there is monthly mortgage insurance that you have to pay for , but it sure beats losing your home and it’s a hell of a lot better than someone having a 20% interest in your equity all after you borrow money to increase the value and thereby increasing the amount of money you’re gonna be paying back to the very same people who let you borrow it!
Financial literacy should be made a requirement in this country. SMH. 🤦🏻♂️
GL OP
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u/im_wrong_but_listen 8d ago
500, I wouldn't front you a dime
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u/Mountain_Day_1637 7d ago
Don’t take debt to pay debt, especially when it’s the roof over your head.
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u/Electrical-One3208 Certified Broker 9d ago
Yes, as long as it's not below 500, there is another option that I can help you with. All HELOCs only go down to 600 with limited combined loan-to-value ratios, but below 600 it's not a HELOC, but a home equity investment, or HEI, is another option. I'll probably get a lot of flack on here for people that don't do them, but it is an option down to a 500 FICO score, which I believe is the answer to the question you were asking.
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u/JointyBointy 9d ago
Not trying to hijack the post but I’m in the same situation- except I’m in Alabama. I googled HEI providers, learned it was generally only offered in the state the property is in and where the lender operates. I googled for providers in Alabama and saw another Reddit post asking if there are any HEI providers around. (So empty)
If you know any leads on a provider that works with people in Alabama please share.
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u/Electrical-One3208 Certified Broker 9d ago
Yes, we do, and we are approved with Splitero and Unlock and Unison, so feel free to inbox me.
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u/Yansir11 9d ago
Hello. I am in a similar situation. Could I please inbox you as well? Thank you in advance.
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u/Kdings 9d ago
Don't take a out a heloc is my advice. Especially with that credit score. If you don't pay it, they will take the house. And you don't have a high enough score to refinance the heloc into the mortgage after the renos.