topic Re: Rebuilding thin credit to get a cash out home refinance in Rebuilding Your Credit

Rebuilding thin credit to get a cash out home refinance

Anonymous — Thu, 25 Jun 2020 21:00:12 GMT

Hi There,

My husband and I always paid cash for things and now we want to refinance our home and take some of the equity out. Our current mortgage is paid directly to family member, we want to get the cash out refinance in order to pay him off so that he can pay medical expenses. We have considerable equity in the property/home we purchased.

My current credit is pretty good but it's thin:

Fico Score 8

Equifax 732

Transunion 741

Experian 690

Capital One Platinum secured with $1300 available (I use about 3% on average, never late opened July 2019)

Self Lender Loan has one month left on it, never late $1,700 opened July 2019, I plan to open another one afterwards for a revolving account.

Comenity VS credit card for store card, $500 credit. Opened September 2019

I have one late payment on Comenity that I am working to remove, no other collections or late payments.

My husband's credit mirrors mine, he does have a car payment with a couple late payments over a year ago.

We are self-employed.

Can anyone help us navigate continuing to build our credit? When should we apply for more credit cards? Which ones?

How long should we wait after opening additional credit to let our credit history age a bit before applying for a refinance?

Anything I have not considered yet?

Thank you!

Re: Rebuilding thin credit to get a cash out home refinance

FireMedic1 — Thu, 25 Jun 2020 22:29:39 GMT

@Anonymous wrote:
Hi There,
My husband and I always paid cash for things and now we want to refinance our home and take some of the equity out. Our current mortgage is paid directly to family member, we want to get the cash out refinance in order to pay him off so that he can pay medical expenses. We have considerable equity in the property/home we purchased.
My current credit is pretty good but it's thin:
Fico Score 8
Equifax 732
Transunion 741
Experian 690
Capital One Platinum secured with $1300 available (I use about 3% on average, never late opened July 2019)
Self Lender Loan has one month left on it, never late $1,700 opened July 2019, I plan to open another one afterwards for a revolving account. You already have a a mortgage which is considered an installment loan. More loans wont do any good.
Comenity VS credit card for store card, $500 credit. Opened September 2019
I have one late payment on Comenity that I am working to remove, no other collections or late payments.
My husband's credit mirrors mine, he does have a car payment with a couple late payments over a year ago.
We are self-employed.
Can anyone help us navigate continuing to build our credit? When should we apply for more credit cards? Which ones?
How long should we wait after opening additional credit to let our credit history age a bit before applying for a refinance?
Anything I have not considered yet?

Thank you!

You dont need more credit for now since you want to refi. Work on the baddies and clean them up. Heres a thread on GW's. But it isnt 100% success rate. Only have 1 card for both of you report a balance under 8% each month and pay the other one off before statement cut date.

https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/The-Saturation-Technique-Best-GW-adjustment-odds/td-p/4727098

Re: Rebuilding thin credit to get a cash out home refinance

Anonymous — Fri, 26 Jun 2020 14:30:35 GMT

We are paying our relative mortgage payments directly rather than thru the bank. We were left this family ranch land in their inheritance but filed the deed early and started making payments to them directly to help them out in their last years as they age and are incurring a lot of expenses for medical care and at home skilled nursing, one of the relatives has late alzheimer's and it is expensive to take care of their daily needs. The mortgage is legal because we drafted the documents and filed them at the courthouse, but the payments are not helping our credit because they are not thru a bank and are not being reported to the three credit agencies. That is why we need to show a revolving account (self lender). We want to take out a refinance mortgage to pay off a lump sum to our relative and to make some necessary repairs to the house. Does that change our approach at all? Thank you for the advice.

Re: Rebuilding thin credit to get a cash out home refinance

Anonymous — Fri, 26 Jun 2020 14:32:28 GMT

If it helps, we have a lot of equity in the property above what we are going to cash out. At least $750K.

Re: Rebuilding thin credit to get a cash out home refinance

FireMedic1 — Sat, 27 Jun 2020 01:06:55 GMT

Nah. Just work on the baddies. The rest will fall into place.