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rebecca_zamora · Joined: 15 Feb 2008 Posts: 1 1.50 Dollars($)

My husband and I need a 125%heloc, but our credit is 685 and 675 and we live in california. Is there anything we can do?

sara · Posted: Fri Feb 15, 2008 9:36 pm Post subject: RE: 125% heloc

HI Rebecca,

Your credit scores are impressive, so why do you think you won't get a 125% heloc with such a score? Talk to a few lenders about your requirements. I'm not aware of your financial situation, whether you are self employed or working somewhere. Such things count when you apply for a loan. Also, how much of debts do you have and what's your incomre like? This will determine your debt to income ratio which needs to be considered if you wish to qualify for a loan.

however, I would advise that you consider your affordability and only then go for a loan higher than your home value. This is because in case you cannot pay and default on the loan, your home may not get easily sold off if the home sales market isn't good enough. I'm saying this keeping in mind the recent foreclosures and low home prices in the markets.

Take Care

gmakerley · Posted: Sat Feb 16, 2008 6:47 am Post subject:

i cannot fathom that there would be a lender willing to go to 125% of the value of your home, regardless of your credit scores.

the irresponsible methods of lenders, in granting loans equal to or in excess of the value of properties, has been a prime reason why we are in the situation we are in as a nation.

i pray that the irresponsibility of the past won't be forgotten so soon, and that a little bit of sanity might affect our lending institutions.

i'm sorry if this seems like a diatribe against you specifically, rebecca. it most certainly is not - rather, i am appalled at what has taken place over the last few years and the thought that there would be a lender (hopefully only one) who would consider such a risky loan.

jeffselan · Posted: Sat Feb 16, 2008 9:04 am Post subject: The sad thing is.

The sad thing is, if there is a lender or broker that can find it, it will get done.

Posted: Sat Feb 16, 2008 4:07 pm Post subject:

Your question brings up some interesting points. No, your credit scores are NOT "impressive". This is "sales schmooze" usually designed to move you towards a closing pitch. This is NOT Lake Wobegone! Your credit scores are below average. They still "acceptable" in the prime arena but if you were going a Fannie loan, the 675 would cost you 0.75 points. In terms of "real money", that's $2,250 more in closing cost and/or a higher rate on a $300K loan! A "125", if such an animal exists anymore, would likely further hurt your credit standing. Worse credit score influences a whole host of other costs – insurance, credit card rates, etc. Better to tighten your belt and work on improving your FICO scores than looking for a quick debt solution to help cash flow.

It seems the American way to get upside down in car loans – listen to the radio ads. It's proved not such a good idea in home loans and the borrowers are the first to run to the media to claim they were deceived. Most of the industry has realized these are bad loans if for no other reason than it takes long to foreclose a home than repossess a car and I do not think you will find a 125 available. Actually the nonavailabilty is to your long term benefit.

Sorry for the "tough love"

Posted: Sun Feb 17, 2008 5:04 am Post subject:

You can try Irwin home equity.......

Samantha · Posted: Mon Feb 18, 2008 12:06 am Post subject: RE: lender providing 125% loan

Hi Rebecca,

Welcome to forums.

I still don't think you won't get a 125% heloc simply because you have a score below 700. But there may be other factors involved if you are denied a loan.

I think it is better if you consult a few lenders and find out what's in store for you. You can even talk to a few lenders in the community. The community lenders offer a wide range of loan options to people having different credit profiles. So, in case you are interested, send us your request for mortgage quotes with the minimum details. We can then pass on your details to selected lenders so that they can try to match their profiles with your loan requirements.

As soon as the lenders are able to match their profiles with that of yours, they shall contact you to talk about the quotes they can offer.

Hope this helps...

God bless you.

Samantha

gmakerley · Posted: Mon Feb 18, 2008 7:51 am Post subject:

guest's "tough love" was well-deserved, well-meant, well-considered and well-described.

i disagree with the 675 score being "below average." in the current environment, it may, in fact, be "impressive" to a lot of lenders. nevertheless, it certainly is not sufficiently good for any reasonable lender to go ahead with a 125% ltv second mortgage.

most lenders have eliminated the 100% financing, let along greater than that. yes, there are undoubtedly some sub-prime folk out there who will take such an inordinate risk, but they will naturally charge an exorbitant interest rate for the privilege.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

Sorry, but the 125% just isn't available anymore. Even if you did run across that one lender that would do it, the rate would be as high as a credit card at 15% or better. I just don't think it's an option right now.

kenl314 · Posted: Fri Feb 22, 2008 6:19 pm Post subject: 125% heloc

Some good comments and insight just here on this discussion topic. I'm on the boat with people that say there should be no one that would consider underwriting this now, and it appears I'm correct. Of course if there was a broker or LO in the state that "could" do it, then naturally it would be done and closed. For a buyer, all it takes is 1 "iffy" LO out of 1000 to get someone into something that may tank in 2-3 years. As a LO, I don't like to say that, but....
It appears that 2008 will bring us back to a healthly reality- which in turn is good for everyone- including Rebecca. Though that's hard to hear. A lot of people are in the same boat.
That's 2 boat references in one mortgagefit.com post Confused

.
Thanks,
Ken

charlesarmbruster · Posted: Mon Feb 25, 2008 12:18 am Post subject:

The IRWIN webpage describes a minimum 660 FICO for their 125%CLTV product. If they are still in business, contact them.

I like the conversation here about product respectibilty -- let's remember that the client may choose any available product he can find to finance his residence -- there are always extenuating circumstances. I know that I've never written two loans alike. I do, however, consider my job to be certain the client knows what he/she is buying in the way of the financing -- it is my 'hypocratic oath', so to speak.

If this CA couple have need, and they have the income, they can access IRWIN for a refinance...if they are still in business.

ckalvesmaki · Posted: Tue Feb 26, 2008 5:23 am Post subject:

The comment about Irwin was made by me. Lisa..they still offer the product...

Having said that.......I don't think anyone on this forum should even begin to pass judgement.....We don't have any idea as to why the OP is looking for a 125% loan. Having been in a position to need a product like this myself 8 years ago.....medical exspenses due to the pre-mature birth of my kids.....I would never deem to ASSUME that a loan is or is not a good fit for a consumer.....our JOB is to offer advice......and not pass judgement it's that simple......I have in the past written these loans and have to tell you that with out fail......every single one I wrote had a very good net tangible benefit......

As for the comments about credit scores....we all no those can be manipulated via AU accounts.....etc.....again making a judgement based on a 3 digit score is unreasonable.

charlesarmbruster · Posted: Tue Feb 26, 2008 11:39 am Post subject:

You make good points, until you opine about credit scores.

Firstly, every lender still alive is surviving because he/she is working the guidelines, i.e. -- setting FICO limits, including FHA product....previously unheard of.

Secondly, I believe any lender offering a 125% product is going to manually underwrite it.

All HELOC products, that I am aware of, are requiring high FICOs. While AU might scoot a lower FICO through, I'm certain that is not the intent of the system -- we shouldn't work with that assumption. Even though the risk is not ours, personally, we are guardians in a sense.

Hey, who wants to license underwriters? Let's see a show of hands?

ckalvesmaki · Posted: Tue Feb 26, 2008 11:45 am Post subject:

Charles.....I wasn't trying to "opine" about a credit scores......I view it as passing judgement when caps are used to make a statement about something being "NOT impressive" and when it comes to FICO scores and models....it can be a patently unfair model......we have to live with it yes....and it is probably right more than it is wrong.....but with out seeing the OP's report.....I would never make a statement like that......

charlesarmbruster · Posted: Tue Feb 26, 2008 12:46 pm Post subject:

And, I will agree with you -- making a judgement on a 3-digit score IS unreasonable.

I'm reading you too literally -- I know that we all act in good faith, and that a system of check-and-balances exists throughout the process. Those who failed to observe the guidelines are now paying for their indiscretion; the rest of us will reap the rewards as we work even harder to service the pool of borrowers stuck with contracts they are finding hard to manage.

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