Question about HELOC

[Excalibur]

Not sure if this is the right place to post this?


I have a question about a HELOC.

I applied at my bank (credit union if that even matters) and the person taking the application wasn't very helpful. Probably because once she learned I had a 600 score, it was in her eyes, a lost cause. She submitted it anyways and said I would hear either way within 24/48 hours. Yet to hear back.

I also went to apply at a bank my dad recommended.

She gets to asking me questions and I get around to informing her that I'm shopping my loan and that I just applied at another bank. She suggested I wait till I hear from the first bank before submitting. I said alright, but since I am here let's go ahead and fill out the papers.

Both said it didn't look promising due to my score. I agreed, but asked if they can manually underwrite it? Both said no.

Does anyone do manual underwriting for a HELOC?

Yes, my score sucks. But my house is fully paid off. Thought that would look good to them. And while she was impressed, I get the idea it makes no difference.

I wanted to borrow 17.5% of the value of my home, which seems more than reasonable to me, considering I have seen loans of 80 LTV all the way to 125 LTV, which is insane to me, but maybe I am not understanding something.

Anyways, isn't part of the point of a HELOC is for people with bad credit, or no? Way I see it is my credit sucks, so here's my collateral, valued at 82.5% more than I am asking for.

Being that my mortgage was hard money, it doesn't show up on credit reports, and therefore the massive and on time payments are not reflected.

I was wanting the LOC for an extra reserve when I find opportunities and am low on cash.

Am I just SOL?

 

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[Red]

Can you get your hard money lender to report to the 3 bureaus to help your score? Or why not just do another HM loan? I've got people here in the valley that will do them for 9.9% (but I have no idea what their other stipulations are). And I just saw your location.... I have in-laws in Nampa, LOL.

 

[DeletedUser10]

I used to work for a major bank and take HELOC applications. With today's economical climate... most major banks standardized the underwriting and loan application process. You pretty much need to have a decent to good credit score. Get a credit card, use it wisely for a few months and that should boost your credit.

A new home mortgage is an option... There are also alternatives out there which I am not familiar with, like hard money lenders.

Credit unions sometimes manually underwrite, yet their qualifications can be more strict.

Hope this helps...

 

[lleone]

I'd agree with fastlanerider. I would work on your credit score. The other thing is you didn't mention your income. Banks are also going to consider how strong your financial position is, so if you haven't worked at a specific job for a long time or your salary isn't that high, they may count it against you (banks love slow laners with high income).

 

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[Excalibur]

Red, I could ask my HM lender if he'll report to the bureaus. Reason I didn't want to get another HM loan is he charges 10% plus penalty if paid off in the first year. A 10% mortgage was a large part of my motivation to get it paid off quick. Plus with him I am pretty certain I'll have to borrow X amount, where as with a HELOC, I wanted to qualify for X, but not necessarily take that entire amount right away.


10% is fair. He was taking a risk on me. But now that I have 100% equity, I can't get any one to lend at a better rate.



I appreciate the replies. It gives me something to think about.

 

[Mike3234]

You have to try small portfolio banks who keep the loans they right if your I'm the New York are Hudson City Savings may be able to help.