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Home Equity Loan/Line with Bad Credit?

Coolriver
New Member

Home Equity Loan/Line with Bad Credit?

My score is around 620, mainly due to maxed out credit cards because of family illness and having to move. I know the score is poor. But on the plus side, my CLTV will be less than 80%, and my DTI is under 43%. The purpose of the loan is debt consolidation, so the loan will not increase my DTI. Are there any lenders out there that will take me? And I'm wondering is it best to apply for a HE loan, or apply for a line of credit and then fix the rate? Or does it matter? I appreciate anyone who has guidance to share. Thank you!

Message 1 of 8
7 REPLIES 7
Shooting-For-800
Senior Contributor

Re: Home Equity Loan/Line with Bad Credit?

I would just check around.

Your rate won't be great, but better than you debt rates, I assume.

I would try for HELOC.

Most are adjustable rates.

 

No chance getting any 0% cards or offers?

GL!. 

Rebuild started in 2014  -  $100k unsecured credit in 2017  -  $400k unsecured credit in 2022.

DON'T WORK FOR CREDIT CARDS ... MAKE CREDIT CARDS WORK FOR YOU!


Message 2 of 8
ShanetheMortgageMan
Super Contributor

Re: Home Equity Loan/Line with Bad Credit?

The ones I'm familiar with require 680 scores.  Are there any personal loans you can apply for and use to pay off your credit cards?  Converting it from revolving debt to installment debt usually improves credit scores.

Helping people with mortgages (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 3 of 8
Mortgage-Specialist
Established Contributor

Re: Home Equity Loan/Line with Bad Credit?

I'm seeing a 660 score minimum.  If anyone else has seen lower please chime in. Thank you

Message 4 of 8
Coolriver
New Member

Re: Home Equity Loan/Line with Bad Credit?


@Mortgage-Specialist wrote:

I'm seeing a 660 score minimum.  If anyone else has seen lower please chime in. Thank you


Guaranteed Rate says their minimum score is 620. Are they a good company to work with?

Message 5 of 8
Coolriver
New Member

Re: Home Equity Loan/Line with Bad Credit?


@Shooting-For-800 wrote:

I would just check around.

Your rate won't be great, but better than you debt rates, I assume.

I would try for HELOC.

Most are adjustable rates.

 

No chance getting any 0% cards or offers?

GL!. 


Thanks! I never thought about looking for a 0% card, with my low score. But great idea--I will look!

Message 6 of 8
oorhett
Regular Contributor

Re: Home Equity Loan/Line with Bad Credit?


@Mortgage-Specialist wrote:

I'm seeing a 660 score minimum.  If anyone else has seen lower please chime in. Thank you


Unify Financial CU said 630 middle (Tri-merged)

Discover advertises 620 for their Home Equity Loan not sure which score they use

I'm sure there are others out there that may go to a lower score, I think the OP would just need to make some calls and ask. Keep in mind they may use one bureau and usually not Mortgage scores. So just need to start making calls and find out. 




BK 7 5/19 Discharged 09/19
Beginning Scores - EQ 579, TU 565
Current Scores(Vantage) - EQ 728, TU 706 / (Fico8/9) EX^8 679 TU^8 654 EQ^9 656
Mortgage (12/22) - EX 698 / TU 713 / EQ 689
Message 7 of 8
CYBERSAM
Senior Contributor

Re: Home Equity Loan/Line with Bad Credit?


@Coolriver wrote:

My score is around 620, mainly due to maxed out credit cards because of family illness and having to move. I know the score is poor. But on the plus side, my CLTV will be less than 80%, and my DTI is under 43%. The purpose of the loan is debt consolidation, so the loan will not increase my DTI. Are there any lenders out there that will take me? And I'm wondering is it best to apply for a HE loan, or apply for a line of credit and then fix the rate? Or does it matter? I appreciate anyone who has guidance to share. Thank you!


Home Equity Loan would certainly work for you! They are not looking for how much you owe as long as you have paid your mortgage on time in the past. If you have the equity, then you should be good.

Also how much are you looking for?

CU are best for this to my experience and they don't charge you fees as much. Service CU was great for me, also Pendef. DCU is also good but their DTI is high for underwriting, I used them for refinancing afterward.

 

EDIT: I would not try to app for other credit cards to use BT. With your score and UTI, even if you get approve, most likely it'll be toy limit that has no value to you and you'll be classified as credit seeker.







              
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