@Anonymous wrote:
Hi all,
I've been browsing these forums for quite some time and have gained a wealth of knowledge from this community. Kudos to everyone!
My fiance and I are looking to renovate a recently purchased home, which is in mine and my parents name. At the time of purchase, the home was appraised by the bank for just under $500k. We currently owe $220,000 with 3.75% interest.
My credit score is in the mid-700s with no other debt other than mortgage; the fiance's not so stellar. He last checked his CR last month and his Experian score was 620. He has a judgment that was paid in full a few years ago, as well as a couple of collection accounts that are due to fall off in 2016. We both work full-time with a combined income of about $100k.
What loan options do I have available to me (home equity loan, home equity line of credit, personal loan), and would it hurt my chances of a loan approval (for any of my available options) to have the fiance as a co-applicant? We are looking at about $20-$25k in renovations. I'm quite positive my income ($53k base + commission) would not allow me to obtain a loan for the amount we need for the renovation. I also do not want to ask my parents to co-sign/apply as my dad is retired and my mom will soon retire within the next year or two. Appreciate any insight and suggestions. Thanks!
You will need to explore other options for your $25k loan. In order to obtain a loan using the equity in your home (HELOC or second mortgage) you would need to have all the people on the deed sign the loan. Those types of loans all use the house/property as collateral. From your post, that is not an option for you.
However, if you want to get an unsecured loan (not secured by the house) then you could try other avenues:
- crowdfunding is one option.
- Unsecured personal loan is another.
- Saving out of your current paycheck is an option
- Getting a second job and using that income to fund your improvements is an option
- Selling excess stuff around the house can get you a nest egg
- Loan from your retirement account (not really a good option, but it is an option)
- Credit cards with zero percent - like Lowes or Home Depot (I also think this is a poor option)
- Barter goods and services you have for improvements that need to be done on your home
Personally I think it is a good idea that you not secure a $25k loan behind your mortgage. Exploring one or more options above ought to get you the $25k you need to do the improvements.
