+1 vote
This house is not our main residence. Nothing but taxes is owed on this house. Would like to finance a small mortgage to pay off bills and improve our credit score.
asked Jan 25, 2018 in Refinancing by LuAnn

2 Answers

+1 vote
If you owe nothing on your property, and only want a small loan for a few bills, a home equity loan or HELOC (home equity line of credit) would probably work very well for you. A low loan-to-value (the amount you borrow divided by the value of the property) can overcome many credit issues. If one of those bills is a tax lien, however, some lenders may balk at refinancing you. Those that are willing may require that the lien be repaid from the proceeds of the loan before you receive any additional proceeds.

If some of those bills are credit card accounts, I suggest that you get help from a non-profit credit counseling service for budgeting advice before using home equity to pay off the accounts. That's because about 85 percent of people who consolidate debt with mortgages end up running up their balances again and in worse shape than before. It takes knowledge and discipline to do this. I am sure that you can be successful if you do it the right way.

Finally, understand that it is harder to qualify for home equity loans or any mortgage on a second home than for a primary residence. If you have enough equity in the home in which you live, it might be easier to get a loan against that one. A good loan pro can help you with this.

Find one here: https://themortgagereports.com/ratequote
answered Jan 25, 2018 by GinaPogol (47,650 points)
0 votes
Most banks require 700 plus credit scores on HELOC'S.  You may want to do cash-out refinance. 80% Conventional, 85% FHA, 100% VA Loans.
answered Feb 6, 2018 by GustanCho (106,540 points)
497 questions
654 answers
884 users