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gmakerley
Community Mentor
Joined: 09 Nov 2007
Posts: 7089
Location: bloomfield, ct
12.19 Dollars($)
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someone with a credit score of 570 has slim chance, frankly, of obtaining financing in these times; particularly if you are talking about a home equity loan. the home equity lending market is shrinking fast, and loan possibilities are drying up minute-by-minute.
that's not to say it's impossible. you ought to check locally with a few local lenders (bank, credit union, etc.) to see what their guidelines are. i would advise you to do this prior to making any changes to the title of your home.
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George M. Akerley
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Caron
Moderator
Joined: 19 Jul 2005
Posts: 1562
Location: florida
266.54 Dollars($)
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Post subject: RE: |
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Yes george, a score of 570 isn't that good enough to qualify for home equity financing. And, even though one may qualify, it won't be a good enough deal isn't it? better to wait for some time, raise the score and then try for loans. But what's the reason behind the declining popularity of equity loans? may be it's due to subprime crisis and the rising foreclosures, isn't it george?
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gmakerley
Community Mentor
Joined: 09 Nov 2007
Posts: 7089
Location: bloomfield, ct
12.19 Dollars($)
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what we've seen almost countrywide is a decline in property values. we've also seen foreclosures like a plague of locusts. some of this can certainly be laid on the "crisis" caused by subprime lending, but our lending attitudes in the past several years became far more liberal than previously had been the case.
the new-found liberalism in our lending standards created the 100% financing situation that is so abundant in the marketplace (still). suddenly, we were allowing virtually anyone to borrow up to 100% of value on home equity loans - many of them being lines of credit that allowed repayment of interest-only. this became such easy money that people flocked to their banks, credit unions, mortgage companies, etc. to avail themselves of this easy credit.
our situation has changed radically, and equity no longer exists in many locations. as those equity line rates increased a couple of years ago, lots of borrowers discovered they were only able to make their interest payments (and even then, with difficulty). by failing to reduce their principal balance, they were eating into their equity day-by-day.
with the declining values of homes, the mindset that allowed borrowers with poor credit, questionable income and negligible reserves to obtain 80-15 and 80-20 loans; we find ourselves in a predicament that seems to worsen daily.
the 80-20 loans have pretty much disappeared. 80-15 loans still exist, in small pockets. there are, of course, lenders out there who still lend up to 100% of value on a home equity loan (small, institutional lenders predominately, i believe). but, of course, the market to whom they will lend has shrunk. no longer will you be able to march your 600 credit score into the local branch and walk out with carte blanche up to 100% of your property value. for that matter, if your value today is $250000, for example; tomorrow's value might be $240000. where does that put the lender? where does that put the borrower? the answers to those two questions are readily apparent - "in trouble."
we've seen a return to the conservatism that predominated the marketplace in years past. for 2008, this is a very good sign. we need to retrench and fix our problems before we begin to go back to the liberal attitudes of the past.
it is a sign of the times to drive down the street and see foreclosure signs peppering the yards of some of our neighbors; but it is not a welcome sign. we need to eliminate our excessive ways in order to go back to some sort of normalcy.
the "equity crunch" is real, and it only makes sense to eliminate the riskiest product lines that we lenders have offered.
i trust that some sensibility will be restored to our mortgage marketplace in the very near future. in some cases, there has been an overreaction to what is perceived to be a crisis. sooner than later, i hope, we will be able to return to normalcy (whatever that may be) and continue to do the very good things we've been known for all these years.
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George M. Akerley
Loan Consultant
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BZCHARLIE
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Post subject: equity loan income requirements AND AMOUNT AVAILABLE |
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home value==400000.00
INCOME LIMITED
AGE 92 |
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SONNY BOY
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0.10 Dollars($)
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Post subject: EQUITY LOANS |
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| REQUIEMENTS AND AMOUNT AVAILABLE |
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sara
Moderator
Joined: 05 Jul 2006
Posts: 1649
Location: New Brunswick, New Jersey
308.05 Dollars($)
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Hi BZCHARLIE,
3 things are important when it comes to qualifying for a home equity loan. These are your credit history, debt-to-income ratio and the loan-to-value ratio. Know more about the qualifying criteria and how much to borrow from http://www.mortgagefit.com/home-equity.html .
Take care |
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lisascherzer
Joined: 04 Jan 2008
Posts: 755
1.07 Dollars($)
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It is very difficult ot find a lender that will do no income verification for those with limited income however there are a few lenders left.
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Drmalisha8
Joined: 22 Sep 2008
Posts: 2
1.52 Dollars($)
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Post subject: Help |
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| I have a first mortgage of 93,000 and a home equity loan of 13,000 and i am about to forclose on the first mortgage what will happen to the home equity loan |
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jerry
Moderator
Joined: 17 Oct 2005
Posts: 1753
Location: MICHIGAN
259.81 Dollars($)
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MORTGAGE LOAN AGINST HOME
DOCUMENTS REQUIRED |
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BABAN RATHOD
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Post subject: MORTGAGE LOAN AGINST HOME |
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I HAVE HOME AT AURANGABAD MAHARASHTRA INDIA
AMOUNT 7,00,000
BUT NOW I WANT 5,00000 LOAN AGINST THIS HOME
SO HOW I CAN GATE |
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| I think you should consult a bank loacted in your area. They will be able to tell you about the loan terms and other details. You may consult any financial institution as well. |
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Carolina dreaming
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Post subject: I want to relocate from Michigan to North Carolina |
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| I fear I may lose my job and I really want a "paid for" property in my portfolio. I can't figure out the best way to accumulate monies to purchase a bargain. I owe $77k on my current mortgage. I have no idea what the appraised value is now that the market has popped. I was estimated as high as $145k just before the burst but I could truly be $115k. My current interest on the mortgage is fixed at 5.5%. I have three debts...my house, student loans $20k, and $2000 left on my car. My credit score is pretty good. I'm hoping to find a second-home to serve as a rental and if I end up jobless to serve as a possible "run-to-since it's paid-for" residence. I am flying to North Carolina this Saturday to check out some jobs, properties and neighborhoods. I just haven't figured out how to pay cash for a new property or the taxing situation. Perhaps, I could purchase the home not as an individual but under a business. I recently started a side business (my losing-my-job backup plan) but it is too "new" to get a business credit line. I have a business checking account with enough money to purchase something really inexpensive. It would only be enough to purchase a distressed property or one in a not so safe neighborhood. I'm working on building business credit now. Help! I'm trying to make contingencies here that are legal, ethical and will benefit me investment wise. |
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Niicss
Joined: 03 Oct 2005
Posts: 2571
Location: New Jersey
401.74 Dollars($)
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Hi Carolina dreaming
You have mentioned that you have 3 debts - mortgage on your house, student loans $20k, and $2000 left on my car. Before trying t purchase a new property, I would suggest you try and pay off some portions of your student loan and your car loan. This will give a positive boost to your credit report. Moreover getting a loan for a new property will also depend on your debt to income ratio. Keeping your present debts in mind, you can calculate your debt to income ratio by using the following link:
http://www.mortgagefit.com/calculators/diratio.html
In my opinion, if you purchase a distressed property or one in a not so safe neighborhood, it will be difficult for you to rent out the property. You should wait for few months and pay off some of your debts and then try to get a mortgage.
Thanks.
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carolina dreaming
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Post subject: thank you Niics |
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for the quick response. I would have paid off the loans and car before I was laid his past summer. Luckily, I was called backed to work but I have no faith in job security anymore. I fear if I wait I may lose my job and credit nd then not be eligible for anything. Right now, I have a job, some money in the bank, and very good credit. (((sigh))
I'm afraid to let any money go...but I'm willing to take a risk if it means I won't be homeless if I lose my job and can't find another. Perhaps, I will just pay my car off...so at least the repo truck won't circle my block like a vulture! LOL. |
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