Where to get a HELOC?

[AnaMKMK]

Just a quick question....

Where can you go for a HELOC with bad credit?

My Mom, who filed for bankruptcy almost 4 years ago needs to do some home improvements, her credit is not good at all, but she needs about 15,000 for improvements. She's already called her mortgage lender, they don't offer HELOCs.

Thanks

[Lel]

How much equity does she have in her house? And just how bad is her credit?

She can go to any large bank with mortgage services - B of A, WaMu, US Bank, etc - to see what is available. All the banks are tightening their requirements for HELOCs.

Before she moves forward, has she figured out how to keep control of her debt? Would she be able to make the payments on the $15,000? If her financial situation hasn't improved and she hasn't changed her spending habits, then a HELOC could be very dangerous. If she defaults, she can lose her house.

[AnaMKMK]

The house should be appraised at about $320-340k, thats a conservative estimate. She owes about $130k on the house.

She's excellent about making her payments, although sometimes late. She filed for bankruptcy after my Father passed away about 5 years ago, but since her filing she hasn't worked towards rebuilding her credit.

she won't have any trouble making these payments and worse comes to worse I'd make these payments.

She's already spoken to someone about getting a HELOC and I know the markets bad for that now, especially for someone without good credit. She said she's willing to refinance her existing mortgage to take some equity out, but she's currently got an interest rate of 5.9% and with her current credit the new rates would be higher. Her credit scores are 550 - 610, I don't remember which is which, but thats the range.

[Lel]

Is she in a rush to do the improvements? If not, then she could work at rebuilding her credit to get her scores above 600. I have to believe that with that much equity, someone should be willing to give her a HELOC.

How are your scores? Another consideration would be to have your mother put you on the title, and you take out a HELOC in your name. I think that would be legal.

[AnaMKMK]

she actually suggested putting me on the title and yes my scores are better, but i'm looking at purchasing my own place in the next year.

My sister is getting married, so before we have a lot of people visiting, she wants all this done - this gives her about 2 months tops and she wants it all done within the month.

I helped her fill out a few apps for a HELOC, but she isn't qualifying and everyone is stressing how much harder it is to get a HELOC these days, understandable, a lot of people are pushing her to refinance, but I don't want her to get a higher interest rate.

Anyways, we'll see what happens... Thanks!

[Lel]

It's her scores that are making the HELOC hard to get. With about $200,000 in equity, if she had better scores she would easily get a HELOC.

I wouldn't refinance if I were her. With her scores, she'd definitely see a huge increase in her interest rate. She'd end up paying tens of thousands more in interest over the life of the loan. In any case, she probably would have trouble getting approved for a refi.

And I agree with you, it would be a bad idea for you to get on the title and take out a loan if you're looking to buy for yourself.