Hi All!
I keep overanalyzing this, so looking for some objective opinions.
Credit Score: 700 TU, 706 EQ and EX
Income: 50K, Self employed, stable long running business.
Credit: No missed payments, Utilization 90%
So, like for many people, the last few years have been less than stellar. I ended up with 28K in credit card debt across 10 cards, caring for both of my parents (separate households) and supporting my own household at the same time. There will be no more ongoing credit card use/root problem is resolved.
The issue: I need 30K to settle with one of my parents estate.
I own my home with 115K left on the mortgage. Purchase price was 205K 15 years ago. I have, literally no idea what it might appraise for today. Its a unique property in a rural area, not a lot of comps or even recent sales in the area, and the sales that exist aren't comparable. My local bank keeps telling me not to worry about it and that appraisals are running high...but that isn't a sure thing.
I have a current loan with Prosper with a 4K balance left (10K/5 year loan, 3 years in) and keep getting emails that I'm preapproved for another loan. Discover scorecard keeps telling me the same thing. (Have a 5 year history with Discover)
The Question: I feel I have 2 options here. Take a 30K personal loan, wipe out the credit card debt and my score should go up to 760-800 ish, then apply for the HELOC with only my mortgage and the personal loan as debts, or apply for the HELOC and pray that the appraisal comes in at least 215K if they force me to pay off the credit card debt. Also my score would be 700 vs 780. Not sure if score affects a HELOC rate tho, I believe those are tied to prime?
The concerns: I'm concerned if I get a persoal loan next week then a HELOC immediately after it will look like credit seeking behavior. Also, the self employment income. Business has been in operation 30+ years. My financial issues have nothing to do with COVID it's just poor timing. If I take the 30K Prosper loan, pay off the credit cards, and then don't get the HELOC or the appraisal doesn't come in high enough, I'm in a world of hurt. Or if the bank only approves me for a, say, 30K HELOC because of my income. POI is also a concern. I report and pay taxes on 50K of income, but a lot of lenders dislike self employed income. I got my first prosper loan with paystubs, they did require POI the first time.
The main objective here is getting the 30K to settle my parents estate. I can chip away at the credit cards over time if I have to. (though the amount of interest I paid last year as seen in my year end statement left me slightly nauseated)
So, which should come first, the Chicken or the Egg? Thoughts?
Thanks so much in advance!
TGG
