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What kind of loan do we need?

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sphinxpeanut
Established Member

What kind of loan do we need?

Hello Everyone,

Okay this is what we have. 

We own our home outright, never had a mortgage, we paid cash for this place.

We had borrowed about $16000 from friends 2 years ago to finish remodeling, we would like to pay them back full at years end. My credit report has all the derogatory info finally removed except for a Chapter 7 bankruptcy which will be 7 years old this coming February.

My credit is only 18 months old now since rebuilding with new credit trade lines, cc's which are paid in full every month, a car loan which is 1 years old and 2 revolving accounts with low balances, my scores are hovering around 700.

We are wanting to wait for years end so my credit history ages, so what kind of loan should we be considering?

We only would like to take out for the $16000, no more, past experience has taught us to be careful and we are afraid of something going wrong and losing our home.

 

Any advice would surely be welcomed and definitely appreciated.

Message 1 of 4
3 REPLIES 3
RobertEG
Legendary Contributor

Re: What kind of loan do we need?

My first reaction would be to consider either a mortgage loan or a home equity line of credit.

You obviously have a large equity in your home, with no mortgage   Using that property to secure a mortgage or LOC will probably give you lower interest rates.

 

 

Message 2 of 4
sphinxpeanut
Established Member

Re: What kind of loan do we need?

So using a LOC is just like a regular loan?

 

I am sorry, just not familiar with how all this works. So if we can get a LOC, it is just like a regular loan? If we got $16000, we can take the whole amount and pay our friends off, then pay the loan back as regular?

 

No need to pull out small amounts or have to inform the lender as to what it is used for?

 

Thanks in advance.

Message 3 of 4
RobertEG
Legendary Contributor

Re: What kind of loan do we need?

A revolving line of credit  is where you are approved for a certain limit that you can borrow up to.  You then determine how much debt you choose to use against that line of credit.  An installment loan provides you a set amount of money up front, and you repayment under the monthly terms of the loan.

LOCs are revolving llines of credit.

Message 4 of 4
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