Do we qualify for a HELOC?

Asked by Michael G., San Bruno, CA Wed Dec 3, 2008

We purchased a home in San Bruno, CA for $599,000. Our first loan is $417,000 and second loan is $92,000. Are there banks out there that offer HELOCs or Home Equity Loans. We need about $35,000 to $40,000 to pay off our credit card debts since we renovated/remodeled. We spent about $50,000 on the remodel.

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Pete Guichard’s answer
Pete Guichard, , San Francisco, CA
Tue Dec 9, 2008
Depending upon when you purchased your property in San Bruno, it is likely - even with the remodel - that your proeprty value has declined. Given this, there is little to no chance that you'll be able to pull any cash out... As someone else suggests, it is theoretically possible to pull some cash out if (and this if a big "if") your value has appreciated as a result of the remodel. Chances are slim that this will happen.

There is another tack worth considering, although it does not address your question specifically. Consider getting your loans modified. You may qualify for payment reduction if you can make a legitimate case for hardship. As a result, you'll have extra cash available to pay off your credit card balances at a faster rate.

0 votes
David Tapper, Agent, Burlingame, CA
Thu Dec 4, 2008
The only option I see is if you can refinance and get one loan. You said you just remodeled your home. If your home will appraise for $630,000-$645,000 it's possible.

If I were you, I would contact B of A or Wells Fargo and see if they can combine the two loans. It doesn't cost much to find out and well worth it. I don't think getting another second is possible.

Dave Tap Tapper
Web Reference:  http://Teamtapper.con
1 vote
NonRealtor, , 23456
Wed Dec 3, 2008
Pay an extra $1000 / month on the credit cards and they will have a zero balance in 3-4 years. Try to do this soon, because the banks are going to raise the interest rates on your cards. Good Luck
1 vote
Robert Chome…, , San Diego, CA
Wed Dec 3, 2008
Heloc's are very diffucult to get in this market. You have to have a lot of equity in the property.

When did you purchase the house?
0 votes
Alan Tang, Agent, San Bruno, CA
Wed Dec 3, 2008
I agree with Lori unless your remodeling has caused the home's value to go up significantly. Do contact a bank regarding a HELOC and they'll run the numbers for you. Lending guidelines have changed a whole lot, so it'll not be easy unless the appraised value has gone up and the CLTV is decreased.
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, ,
Wed Dec 3, 2008
A HELOC is still counted tward your Loan to Value (LTV) and is refered to as CLTV (combind loan to value)

Most banks that offer HELOCs at 85% CLTV

SO, considering your value hasn't gone down and it's at $599,000; 85% is $509,500 minus your 1st of $417,000 and your second of $92,000 your at 85% CLTV and wont be able to get a HELOC. Sorry to be the bearer of bad news.
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Dallas Texas, Agent, Dallas, TN
Wed Dec 3, 2008
You need to contact a bank difficult to determine is all based on your credit score, appraised value of home, debt ratio, employment history, and etc. HELOC's loans not offered much any longer if at all. Only a few banks in the past had these programs most have stopped offering.
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