Using cc for improvements or loan

[babbles]

I have great credit and just looking at advice, do you think it's smarter to apply for a home improvement loan in conjunction with selling our home or just increasing our credit card LOC?  The plan would be to use the potential equity after the sale to pay the balance back down.  Thank for any suggestions.  My apr is 8.9.  

[SouthJamaica]

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@babbles wrote:

I have great credit and just looking at advice, do you think it's smarter to apply for a home improvement loan in conjunction with selling our home or just increasing our credit card LOC?  The plan would be to use the potential equity after the sale to pay the balance back down.  Thank for any suggestions.  My apr is 8.9.  

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The worst financial mistake I ever made was borrowing against my home.

[Anonymous]

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@babbles wrote:

I have great credit and just looking at advice, do you think it's smarter to apply for a home improvement loan in conjunction with selling our home or just increasing our credit card LOC?  The plan would be to use the potential equity after the sale to pay the balance back down.  Thank for any suggestions.  My apr is 8.9.  

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How long are you thinking you'd carry this balance? Are you going to be purchasing another home in conjunction with selling this one? You have a credit card and/or LOC with an 8.9% is that a PLOC or a HELOC? (Personal, not related to the house or Home Equity, tied to the house). Do you know what kind of a rate you might get on a home improvement loan? I've actually never seen a specific Home Improvement loan, unless you mean like the project loan through Home Depot. Again, I've seen personal loans (generally higher interest) and Home Equity Loans (lower interest). 

If you're buying a home in conjunction with selling this one, I think it's a decision you might need to think very carefully about if your credit score is on the border of any rate-changing tiers, and also if adding a new obligation could upset your DTI. Applying for a new loan will add at least one hard pull (probably three if it's Home Equity) and lower your AAoA if you go for it. And if you're trying to close on a new home at relatively the same time as selling your old one, they probably won't consider the fact that you'll be taking equity to pay it off. And if you use an LOC or Credit Card, then your utility will change and affect your score as well. Which one is worse? Only FICO knows. But the new loan would affect your AAoA long term, the pull(s) would affect your scores for one year and your reports for two. The util using your existing card - it'll return to normal when you pay it off, it's only affected while you're carrying a balance. 

If you're not buying a new home in conjunction with or shortly after selling this one, you've got a bit more freedom. Any pulls associated with a new loan and the AAoA hit OR the util hit aren't as big of a deal. Then you have to focus more on interest. But also, if you think you won't be carrying it that long, the differential in interest probably isn't THAT big of a deal. I don't know your scores but it's likely that any personal loan wouldn't be much better and could be considerably worse than the 8.9% that you could otherwise use. 

I come down on the side of using your existing credit. Curious though if it's a CC or a LOC. GL with the house. 

[babbles]

To the first poster, I know what you mean in a way. I ended up with 3 liens unfortunately and at the time when the housing crashed, couldn't get any help because I kept paying on time and thankfully didn't listen to people who kept saying, miss some payments and you'll get help.

My home back in 2009 was about 115k underwater and because I did keep making payments, I now have equity to sell!!!

My question was in conjunction with selling the home and maybe using the cc for repairs and expenses before it sells. I did do a specific loan improvement from navy federal that I paid off about a year ago.  Rate was 12.5% for 144 months. My Scores  cureently range; 759- 761 and they Just dropped a few points because the first home I had was paid off via a sale back in February.   Appreciate the advice and suggestions.

[babbles]

Sorry, didn't answer the whole question as I was replying  on my phone.  I would use the LOC for about 6 months pay back for repairs.   Any advance would be at a rate of 2% higher than the apr which is actually 9.74%.  But if I wanted to increase the limit I know I would probably incur a hard pull I believe.  

[Anonymous]

This is a no-brainer to me.

First, I would apply for a Lowe's store card for home any improvements. Getting a $10K-$20K limit with a 685-700 TU scores is in the realm of possibility.

Then you get 5% off every purchase

Or...

*No interest if paid in full within 6 months. Offer applies to purchase or order of $299 or more made on your Lowe's® Consumer Credit Card. Interest will be charged to your account from the purchase date if the promotional purchase is not paid in full within 6 months. Minimum monthly payments required.

Or...

Ask for 84 fixed monthly payments at 5.99% APR until paid in full with minimum purchase of $2,000 or more on your Lowe's® Consumer Credit Card.

Language is right off Lowe's website.

[Anonymous]

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@Anonymous wrote:
This is a no-brainer to me.

First, I would apply for a Lowe's store card for home any improvements. Getting a $10K-$20K limit with a 685-700 TU scores is in the realm of possibility.

Then you get 5% off every purchase

Or...

*No interest if paid in full within 6 months. Offer applies to purchase or order of $299 or more made on your Lowe's® Consumer Credit Card. Interest will be charged to your account from the purchase date if the promotional purchase is not paid in full within 6 months. Minimum monthly payments required.

Or...

Ask for 84 fixed monthly payments at 5.99% APR until paid in full with minimum purchase of $2,000 or more on your Lowe's® Consumer Credit Card.

Language is right off Lowe's website.

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Yes it's possible. I have a 695 TU and lowes started me with 5500 Called in to credit solution asked for 40k they gave me 25k. Once they receive my w2 and 2 paycheck stub it will boost to 40k applied for card 3 days ago and sent in POI today

[Anonymous]

Will this new loan affect your new mortgage rate or limit?  Do you need a new mortgage?  

[Anonymous]

@Rott

It's common knowledge that Lowe's even if you send in tax returns saying you make $10 Millon and you have an 850 score won't give more than $35K on a personal store card FYI.

One person had a $35K Lowe's limit already and asked for $40K. A clueless CSR said yes to the CLI, then 5 minutes later a supervisor called him and apologized saying we can't go over the $35K limit.

If ANYONE can show me a screenshot of a PERSONAL (not commercial) Lowe's store card NOT a Lowe's Visa/MasterCard of a credit limit over $35K I will stand corrected.

[takeshi74]

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@babbles wrote:

I have great credit and just looking at advice, do you think it's smarter to apply for a home improvement loan in conjunction with selling our home or just increasing our credit card LOC?

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Depends on the details of the loan as not all loans are the same.  You not only need to consider rates but how long you're going to carry and how much and how it would impact revolving utilization versus balance to loan for a loan and whether or not that even matters (i.e. if you itend to apply for new credit, request CLI's etc while carrying).