Welcome to the forums! I admit I am not very much in the know when it comes to home equity loans. But how high is your CC debt?
|Total CL: $304.1k||UTL: 3%||AAoA: 6.8yrs||Baddies: 0||Other: Lease, Loan, *No Mortgage, All Inq's from Jun '20 Car Shopping|
Going for a HELOC right after the holidays. If you're total equity is 100k, I'm not sure if you can take it all. If you can, I would think your interest rate would be high. They told me to keep it at 75/25. I just want enough for a pool and what goes with it. Did you speak with a loan officier? If you want to consolidate your debt, they shouldn't hold it against you. Makes no sense. Cash out refi might be easier to get?
I would definitely speak with one. I can understand how you feel. It's a big step. They can steer you in the right direction. They can help you.
A HELOC is actually not a "loan," it is a revolving "line of credit", where they approve up to a certain amount for use at your later discretion.
Your payments thus revolve around the balance you have used.
While a HELOC is a revolving line of crediit, if usage is above a certain amount (I believe to be $35K), FICO will treat it for scoring purposes as an installment loan.
Since you are placing the equitiy in your home as collaterall, the risk is much lower to the lendor, and thus qualification is not the same as for a normal loan.
Speak with your creditor. Qualification may be easier than you anticipate.
DCU HELOC is 3.25% currently at 675 EQ FICO 04 (FICO 5 here). Robert is correct in stating a HELOC while tied to the house equity, isn't a loan per se though it can function similarly.
Rates are pretty low frankly and so are the underwriting criteria. It shouldn't be hard to get it underwritten though I think what I'd do is a two step since as you stated you lost a bunch with the credit card balances: get a loan since we're talking fairly small dollar values, you don't care what the APR really is, THEN go get a HELOC or other loan at a better rate frankly after the balances are mostly paid down.
Alternatively you could possibly pick up a credit card or two which might improve your limits, but I think the two step refinance plan is better since higher CL's are a bit difficult with current heavy utilization.
Go make friends with a local CU and see if they can help you refinance the CC debt, and look into something like Lending Club or Prosper even if it's at 20% or higher, anything that doesn't have a pre-payment penalty is just fine for the first loan and then pay it when you can sort it at a better APR using the equity in your house at a much more favorable rate. Ye local CU might have a lower UW criteria too on their top end HELOC rate too, ask around.