Question : Can you use a home equity loan for something other than a home?
I need a loan & some people had suggested I look into this because of the lower interest rates, instead of using high interest (not to mention EVIL) credit cards. But it's not for a home & I don't have enough collateral for the amount I'd like to borrow. I have a great credit score over 700, but also have student loans & other credit card debt, which I am very good at paying at, & make enough to make the payments comfortably. If I can't get a home equity loan, what kind of loan can I get, & at what amount & rate should I expect? I've looked around online, but all the bank terminology does nothing but confuse me, so anyone who could explain this a little more "user friendly" would be helpful!It's not for home improvement. Actually, it's basically a business expense, but I'm not sure if a bank would consider this a business type of loan.Oh, & one *minor* detail... I don't own a home :(
- asked by curiousgirl
All Answers:
Answer #1
you can as usually the loan is just put into yourbank account and you spend it on home renos orwhat ever we were told by the bank manager to saya loan was for the house and look at buying abusiness with the money
- answered by t.s
Answer #2
You can use the equity loan for anything. Theywill literally give you a check book and debitcard in many cases. You are basically borrowingagainst the equity you have in your home. Theinterest you pay on this loan will be taxdeductable and that is also what makes it moreattractive than a credit card or personal loan. Bevery carefull! Turning your home in to an ATMmachine is what has gotten many people in troubleand is what has caused the "credit crisis" that weare seeing right now. The stock market has plungedbecause of this and the negative effects on theeconomy are still being played out. I would onlydo this if it is necessary or if the loan will addvalue to your home. You may find yourself in aposition where your home is worth less than yourfirst mortgage and equity loan which means youwill not be able to sell your home if you have afinancial hardship and you may be forced toforclose like all those people out there...
- answered by Shay nay nay
Answer #3
You have to own a home to get a home equity loan.Equity is the amount of value the house has thatyou don't owe.Say you put down 5k on a 100k condo,and after living there a year they tell you thecondo is now worth 120k. You owe 95k on a 120khome, so you have 25k equity, more or less.You canthen get a 25k home equity loan, and use the moneyfor a car, a face lift, new furniture, or a bigbag of crack, whatever you want.You can try toget a signature loan or unsecured loan, but it'sgoing to be at a high interest rate because it's ahigh-risk loan. You can get your parents orsomeone to co-sign a loan based on their homeequity, but then it become their risk and they ownyou. They get to judge you. They get to ask whatthe loan is for.
- answered by sneezewhiz
Answer #4
Many mortgage companies will allow YOU (over 700credit score) to refi your home for whatever youneed--not just home improvements. Ask for a "homeequity refi(refinancing)". Shop around for thebest deal as there are many companies who WANTYOUR BUSINESS. Good luck!
- answered by Da B
Answer #5
Seek a professional financial advisor, yourfinances seem to be in disarray. Looking for moreloans while you have so many other debts is aserious indicator of financial trouble. If youmake enough to make the payments comfortably, youshould be able to pay them off soon or reduce yourdebt significantly.
- answered by yoji6365
Answer #6
In some cases your total loans may not exceed acertain percentage of the home value.You shouldnot be looking to start a business, which willdrain you dry in the first years, until you getsome of the debt paid down.Never a good idea tojeopardize your home for fancy or credit carddebt.
- answered by P J
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measure and fulfill your financial needs
