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I have some minor home repairs, broken toilet and shower door, replace hall floor carpet. The estimate was a little under $10k ($9,878). I only own $108k left on my mortgage over 7 years. I was wondering if it would be better for me to get a personal loan to cover the repairs instead of a 2nd mortgage seeing as I will be paid off soon. My FICO is ok - 640, i have some late payments from 2016 (3 30 days) and my debt to income is about 40%. thank you for the advice. by dartlife443 from Minneapolis, Minnesota. Jan 22nd 2019 Reply


If it were me I would take a personal loan over a home equity loan under those circumstances.

Jan 22nd 2019
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A HELOC would be best. The rate will be cheaper and you will power the debt either way whether you do a HELOC or a personal loan.

Jan 22nd 2019
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Joe Metzler (JoeMetzler)
#2 ranked lender in Minnesota - 3,908 contributions

I agree, for that small amount, I would self fund with credit cards, a personal loan, or a small Home Equity Loan. I would not refinance the first mortgage.

Jan 23rd 2019
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Steven Brand (stevenbrand)
#1 ranked lender in Minnesota - 104 contributions

If your credit was higher AND depending on your short / long term goals along with your other financial picture would a cash-out mortgage make sense. As mentioned... self fund if possible or a HELOC. Good luck with the updates to the home!! :)

Jan 23rd 2019
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Sunny Singh (916Mortgage)
#352 ranked lender in California - 18 contributions

Personal loan could be expensive due to your credit score and might be hard to get. HELOC (Home Equity Line of Credit) if you already have in place, I would say use this, but if you apply for a brand new one...you may run into issues due to fico, credit history (even though they are older than a year, you might be safe), and property condition. Need more info from you....The carpet - is it bare floor right now or just old carpet that needs to be replaced? Bare floor could be an issue if HELOC requires appraisal (2nd lien positions can be particular unlike 1st lien Fannie or Freddies)The toilet - broken? like physically broken and you can see the damage or doesnt flush/no visible damage just not working?Shower Door - same as above? can a curtain rod be hung? All these household issues are a potential concern to a lender if they are marked/notated by appraiser. Whats your first loan mortgage rate? How old are you? does it make sense to do a refi cash out, possible shortened term so you stay on track with your retirement goalsCall me or anyone of these lenders who replied to go deeper....916-560-1230 (hope this helped:)

Jan 24th 2019
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,703 contributions

More info needed, but in general.. the late payments from 2016 probably wont show on your credit any more, so that's not a problem.. But it also makes no sense to refinance into a new 1st mortgage just to pull out $10K.. (closing costs can be $3K - $5K).. making that a very expensive loan.. You might try applying for a HELOC.. the closing costs on a HELOC are typically under $1000 and it's basically an open line of credit for 10 years against your home's equity.. you apply one time and have access to the funds for up to 10 years... The problem is that most HELOC lenders require better credit scores.. however, depending on the value of your home, if the Combined Loan to Value (CLTV) is low enough, it's possible someone will approve you. If that doesn't work, then a 2nd mortgage will be your best bet,,, or even using a credit card for the repairs.. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / LendUS, NMLS 1938/ AZMB0121893

Jan 24th 2019
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