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purchased my house in cash 24 years ago. need a small loan, $55k for personal reasons. Can use some "best advise" reply's. thanks!

home equity line vs. a mortgage vs. collateral personal loan thanks! by dcoppit933 from Fargo, North Dakota. May 15th 2019 Reply


Dave Skow (daveskow)
#16 ranked lender in Washington - 262 contributions

the best best is likely to be a home equity line of credit ...would need more information though ....if you go with a HELOC - rate will be variable and likely to be in the 5.5% -7% range ...a interest only payment is required..make the payment larger in order to payoff the balance

May 15th 2019
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,240 contributions

Usually there are less fees/costs involved in a HELOC but the rate will be higher. With that loan amount my guess is the HELOC is a better option, but sometimes the qualifying requirements are more stringent.

May 17th 2019
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

Much more info needed, but in short, Everyone's needs are different.. and it's best to consult with a local mortgage professional and let them give you options based on your exact scenario.. What are your credit scores? 750 or 650? What condition is the home in? Model or magazine condition, or lots of deferred maintenance? What about income and/or debt load? Again, much more info needed.. but in general.. A 1st position HELOC will give you the best options.. Typically, the closing costs are less than $1000, and most of the time, there is no appraisal necessary. With a HELOC, you apply one time, and you get unlimited access to your home's equity for the 1st 10 years without having to apply each time you use it.. Think of it like a credit card secured by your home's equity.. After the first 10 years (the initial "draw period"), the loan converts to a 20 year mortgage. Most all HELOC's are an adjustable rate, and the credit, income and ratios must be stellar.. If you have less than desirable credit, or you have debt to income problems, then a cash out 1st position mortgage might be better for you.. the rate can be fixed or adjustable,, and they allow for higher DTI ratios, but the closing costs are higher and you will most always need an appraisal. If your home is in bad condition and wont pass an appraisal inspection, then there are rehab loans that you could apply for. this allows you to pull out the cash needed to do necessary repairs, without having to do them first.. Collateral personal loans against hour home are called mortgages.. unless you are using some other collateral like a paid off car or something like that.. It's also possible that if you have stellar credit, you can apply for a personal "Unsecured" loan.. but like the HELOC, you have to have perfect credit for an unsecured loan that high.. I think you can see by now, there is much more to it then a simple answer.. 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

May 17th 2019
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