Is it possible to get a home equity loan with very low income?

[pie]

There is 50,000 equity in the home.

[silverlib]

1. Yes...

low income people are the ones that banks want to loan home equity funds to because they are more likely to own the house.

Pleae be very careful!

[pie]

2. I hope you have a little advice

I know nothing

[BOSSHOG]

3. Very, very careful

Take a deep breath and think through all your options. Do a financial inventory. Plan where you will be financially 10, 20, 30 years from now.

[pie]

4. Gotta do it, and soon

Brrrrrr the world is cold

[BOSSHOG]

6. No you don't gotta do it.

I don't know your particulars, but there are literally thousands of companies out there waiting in line to get their hands on your mortgage and they look and sound so sweet up front. The vast majority are legitimate and upfront but they don't want you to default either. I'm financially secure with a ton of equity in my property and I would never get a home equity loan. (Please consider that a subjective viewpoint)- you have to make your own. Best of luck to you.

[pie]

12. I, also, was financially secure until my wife became horribly ill

She needed 'therapy' that our insurance did not cover.
She survived but we lost everything in the process.
At 48 we are starting all over again.
May your good fortune continue.

[Worst Username Ever]

5. Banks do NOT want to own the house.

It is a non-performing asset. They make more money on interest from the loan than they ever could from selling the house, which is usually done at a HECK of a bargain, and usually only for the balance of the total liens (the first mortgage plus the second mortgage plus any other liens... no profit involved). It does not earn money like their other investments do, and they will generally do a lot of things before actually foreclosing (the bank where I work will try working out 3-4 different payment plans before beginning foreclosure).

You can get a home equity loan through a broker. Do not go through a bank, the standards are usually too high. Tell them you want a no-doc loan, also called a "stated income" loan. This is a loan that does not require income verification, so your income does not matter. You may pay a bit hight interest rate though, and they generally are going to want to see some decent credit.

Debt is usually not the answer to financial probs, though.

[Robb]

7. On the plus side

...with most home equity loans and lines of credit you can deduct any interest paid, much as you do interest on a mortgage.

On the minus, it's an easy way to eat up your equity pronto.

Tread carefully.

[pie]

8. Can I do this online? Where do I find a broker?

[Worst Username Ever]

13. Yes

The people with whom I spoke that have done this online (ditech.com or whatever) have been happy. You can look in the phone book under "mortgages" and there will be hundreds of brokers, usually with some name like Ameriquest or Ameritech mortge or Summit mortgage or Financial Service Mortgage, inc, etc...

If you go through a broker in the phone book, make sure you ask questions and know who you are dealing with.

[Blue Diadem]

9. Depending on what your current rate of interest is on your mortgage

you may be better off refinancing your house instead of taking on a home equity along with a house payment.

That's what we did when hubby found out his plant was closing. We saved 2% in interest and were able to get the extra money we needed to pay off some other debt.

[Worst Username Ever]

14. True, however

if the rate is not substantially lower, you end up paying a lot more closing costs than you would have to with just a home equity loan. You did the right hting thou IMO, 2% is a big savings, I am sure you made up the closing costs you paid in interest savings.

[welshTerrier2]

10. also consider this ...

many banks offer zero points, zero closing costs mortgages ...

i would compare a home equity loan to refinancing your current mortgage ... the right answer will depend on a number of factors but i would at least make the comparison ...

if you do refinance, you probably should go with a fixed rate mortgage unless you think you might relocate in the next 5 years or so ... looks like rates will be going up on variable rate loans ...

most importantly, don't borrow more than you can handle under any circumstances ... you could end up losing your home ...

[pie]

11. i have had very low income for the last two years

I think banks may not like me so much

[ProfessorGAC]

15. Equity Is Equity

You are borrowing against your own money. So, yes.

Also, it depends upon your credit score. Your credit score is somewhat dependent upon the income, but it's more critical that you have strong payment history and controlled debt ratio. IF you don't owe much, are paying out much, then the income is relative to the expenses.

You should be able to work some reasonable rate and borrowing limit. You might want to look into a HELOC (Home Equity Line Of Credit) Then you only take what you need when you need it and don't increase the total debt load if it's not necessary.
The Professor

[pie]

16. Can I get a HELOC thru Ditech?

Someone mentioned Ditech.
I would prefer to do this online.

[ProfessorGAC]

20. Probably Yes

They're a full featured lender. If the little bank i'm a board member of has HELOC, Ditech will have them, i'm quite sure.
The Professor

One Note On HELOC: Because you're not taking a lump sum, and there is float in the loan, the lender probably charges a slightly higher APR for HELOC than a FHEL. But, if you are only borrowing some small fraction of the equity, you probably will be ahead in the long run, cash-wise.
The Professor

[pie]

21. Good. Now I have somewhere to start

I hate stuff like this

[wideopen]

17. go to your bank

Many banks have special deals for established customers in good standing with good credit. Ask about an equity reserve acct. They approve you for a certain amount based on the property. You can borrow only what you need and pay intrest on that amount.Which by btw is tax deductible. WARNING: don't get any more than you really need and have a repayment (monthly) plan before you start. Be careful, it is really easy to abuse this, I should know ...

[pie]

19. I will be as careful as possible

[amazona]

18. yes indeedy weedy

This is a favorite way for banks to get your property. As another person with very low income, I am offered home equity loans just about every day in my mailbox.

My choice is to keep the equity in my home for true emergencies such as a health crisis since I do not expect to ever have a higher income. Therefore I will not take out a loan against my home for anything less than major. If you have more of a future financially, your home may be a good source of cash. However, keep in mind, once you have borrowed the entire equity of your home, you don't have that source of emergency cash any longer, so it is very important to have some sort of cash savings if another crisis arises.

I don't mean to sound negative but too often emergencies come in cycles. If they came one by one, we could handle them, it's when they come in little groups that it can cause us to lose our homes or declare bankruptcy if we aren't very, very cautious.

Don't necessarily borrow all of your equity, just what you need to get through your current crisis.

On Edit -- OK, I read the rest of the thread, and it seems that you have been through a legitimate crisis and that you will be able to rebuild. If I were in your situation, I would likely take the HELOC from the local bank but I have maintained a good relationship despite my low income with my bank. It somewhat depends on your credit history but I think you will get a loan, it just might not necessarily be at the lowest possible interest rate. Don't be ashamed to speak to a local bank officer if the better deal is offered locally rather than online. They see people in bigger messes every day. If no one ever needed a loan, that nicely dressed loan officer wouldn't have a job! You are the customer, you are a source of business to them, so don't feel inferior or afraid to shop around.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[radwriter0555]

22. CHECK FIRST with the bank who you already pay. I got a VERY

favorable rate with my current lender and took out a nice piece of change with no fees, etc.

So check first with your current lender. It doesn't hurt to ask.

[wideopen]

23. I got a very good rate

no closing costs,and 3 months no interest. Ask to speak to the branch manager, otherwise you will play the car sales game-"I'll have to ask my manager"

[pie]

24. Tried that. sadly, the house was bought thru a Credit Union

they are unyielding