Lots of equity - bad credit....is loan possible?

Guest 0.10 Dollars($)

I have about 80K in equity in my home, but my credit is horrible. I am currently 4 months behind on my mortgage & have been one one repayment plan after another w/them.....now I am working with Loss Mitigation for alternative options to keep my home.

I know mine is probably a really stupid question....but does 80K in equity help my chances of getting a loan? I don't need a lot - just about 10-15K in order to catch up on 1st mortgage & take care of some much needed home repairs.

Are there any reputable lenders for my lots of equity/bad credit situation?

larry · Joined: 27 Jun 2007 Posts: 3328 473.40 Dollars($)

Hi munchkin,

Welcome to the forums.

First of I shall like to say that no question is stupid. If you think it is stupid avoid it, other people may think likewise and avoid it. So that is good you have at least asked the question which may help other people also who are in the same situation.
You have $80 k of equity in your home. So you can try out HELOC.

Now why are you four months behind on your mortgage payments? What is your income per month and your credit score though you have already mentioned "credit is horrible" but will like to know exact credit score now?

Best of luck,
Larry

michelle · Posted: Tue Jan 15, 2008 7:45 pm Post subject:

Munchkin130,

I am sorry to hear that you are having such a difficult time paying your mortgage.

Being 4 months behind might make it rather difficult for you to obtain a HELOC or second mortgage.

I would recommend that you contact a lender in your area - they may have access to a local source of funds to assist you in getting the money you need to get current. Again, that will depend on your actual credit score and your ability to repay the loan.

Another option would be to contact your local HUD office and speak with one of their housing counselors. They may be able to assist you in negotiating with your current lender. Another option would we the non-profit NoArm.org . Their site is www.noarm.org

Please let us know if we can answer any other questions.

ckalvesmaki · Posted: Wed Jan 16, 2008 5:56 am Post subject:

I have about 80K in equity in my home, but my credit is horrible...What is the house worth and how much do you owe on it? I am currently 4 months behind on my mortgage & have been one one repayment plan after another w/them.....now I am working with Loss Mitigation for alternative options to keep my home.

I know mine is probably a really stupid question...There is no such thing as a stupid question....so don't feel bad......most people have never deal with these kinds of situations so you have come to the right place for answers and help......but does 80K in equity help my chances of getting a loan? I don't need a lot - just about 10-15K in order to catch up on 1st mortgage & take care of some much needed home repairs.

Are there any reputable lenders for my lots of equity/bad credit situation?

Welcome to mortgage fit.......Can you give us a little bit more information about your current mortgage.....What we need to know is......Is this loan an ARM that has reset? If it is did your first late occur after the loan reset?

evolovik26 · Posted: Wed Jan 16, 2008 7:00 am Post subject:

80k equity can be alot or very litle depending on the value of the home. Thereare lenders out there that will loan up to 60% of your home worth with bad credit but the interest rate is going to be high.
The real question is even if you get the 10-15k you need to catchup what are the chances you'll be able to make the higher new payments?
Its your income or money management that is the issue here not your home equity. If you cant make payments now how you goingt to with a bigger loan?
My suggestion is to look at selling the home and getting that equity out. If you even net 40-50k out of it its better then nothing and can go long way in getting youyr life back on track.
you can pay your bills and prepay an appartment for a year and then work on reestablishing your credit.
Othervise you stand to lose all your equity on plans that dont work.

brad · Posted: Wed Jan 16, 2008 8:16 am Post subject:

Munchkin,

There are lenders and banks that will refinance your home as long as their hasn't been a lis pendins filed already by your bank. But as others have said you would need to let everyone know the value of your home and how much is owed before we can help.

If their are no judgements against the property at this point you can refinance at 70% of the value of your home regardless of credit. But also as Eugene has said, will you be able to handle the new payments? You have to reall think about it. The new rate is most likely going to be from 10-14% so your best bet may be to try and work out a modification with your current lender.

jheard · Posted: Wed Jan 16, 2008 1:36 pm Post subject:

Lenders look at equity, but also liquidity, ie the ability to make the monthly payments. It doesn't sound like you have the liquidity part. Contact some local lenders. However, why don't you just sell the house?

Guest 0.10 Dollars($)

Thanks for advice - to answer questions for those who might check back here to see if I responded....

My house is worth 160-175K based on sales (not asking price) in my neighborhood. I owe 80K.

Many things led to being behind. Here goes. I got repayment plan 6 months ago - minor plumbing repair made me short $200 on a payment. New repayment plan made - car brakes went out & cost $250 - new payment plan created.

But my biggest mistake? Getting car title loan to travel 14 hours away to see son graduate boot camp in Oct. I'm a single mom of 4 & he begged me & his siblings to be there. When I told him I couldn't afford it he said he had $ to pay for 1/2 of it. Long story short - he wound up not giving me any $ & now he's in Iraq.

In Dec I got a 2 week extention on car title loan so I could buy xmas present for my kids - but on the day I was supposed pay we had a dire medical emergency w/our cat - I wasn't thinking - I didn't call them to tell them & they repossessed car that night. Luckily I had the money - thanks to xmas bonus. Total cost for that one dreadful day:

$675 to title loan co.
$500 to repo co.
$300 to vet

On top of that I had to authorize vet to take $100 out of each paycheck for next 7 paydays. I'm only able to pay $50 - $100 toward principle on car title loan.

When car title loan & vet is paid I will have $700-$800 extra each month after paying all my bills - this includes everything - mortgage, utilities, food, gas, car insurance....ect. So I do consider this a temporary setback.

As for credit history - it is poor due to 2000 bankruptcy, and various financial set backs since my 1999 divorce - job loss, lower wages, lack of child support, costly car repairs, costly house repairs, medical bills....you name, I had it & couldn't always pay everything on time.

lisascherzer · Joined: 04 Jan 2008 Posts: 746 93.70 Dollars($)

Hi munchkin130,

I would try and work out a repayment plan with your current lender since your current interest rate will be lower than if you were to refinance. Many lenders offer a couple different options when you are behind. for example, they may allow you to repay the 4 month delinquent payments over a 12 to 24 month time frame. Another option may be to put the delinquency onto the end of the loan. If the lender is unable to workout a solution for you then you will want to refinance to keep the property. Based on the information you have provided, you should qualfiy for a refinance.

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