Opinions on Home Equity Loans?

[Nutdotnet]

Anyone here ever get a home equity loan. Are they fairly easy to obtain?

My grandfather is thinking about getting one to consolidate his debt. He owns his home (no mortgage) and has a couple of auto loans in his name (which is what he wants to consolidate). Do y'all think (anyone who may have worked in the credit field) he would have much of a problem getting approved? He wants to take out 40k, and his house has been appraised at 200k.

The reason I ask this is there has been some hard times in the family (not money-wise, just with other things) and he needs to get out of one of the car loans and QUICK before the car gets repo'd (car is in his name, but it was my brother's).

Thanks for any advice!!!

 

[Zorro]

Home worth 200k He will have noooooooooooooooo problem with a home equity line.

 

[Nutdotnet]

That's what I thought. I just want to get as much info to him as possible, and maybe some alternatives IF he doesn't get approved.

As far as I know, his credit is from a 2 year loan on a 2001 VW Jetta, and a six month loan on his 2002 Ford Ranger. For years he never had any credit. I would say his credit started probably 3 years ago when he had his nephew co-sign a car loan with him.

I think he was pretty surprised to find his home appraised at 200k (at least that is what Wells Fargo told him the Market Value was). He bought it for 100k.

 

[RossMAN]

Ask Vic for advice but when I worked in home equity we looked at 3 basic factors when deciding on a home equity loan/line of credit.

1) Credit score, credit history, etc.
2) DSR (debt to service ratio your debts divided by gross monthly income)
3) LTV (loan to value ratio)

 

[Lyle]

I think he was pretty surprised to find his home appraised at 200k (at least that is what Wells Fargo told him the Market Value was).

He has not gotten an official appraisal yet? Market Value is different than Appraised Value, generally in my area, market is higher than appraised. I refi'ed a couple of months ago and my market was 370K, but actual appraised by a certified appraiser was 340K.

Still, no mortgage and only thinking of 40K, with ~200K in equity, pretty much a lock in my opinion.

 

[Nutdotnet]

Originally posted by: Lyle

I think he was pretty surprised to find his home appraised at 200k (at least that is what Wells Fargo told him the Market Value was).

He has not gotten an official appraisal yet? Market Value is different than Appraised Value, generally in my area, market is higher than appraised. I refi'ed a couple of months ago and my market was 370K, but actual appraised by a certified appraiser was 340K.

Still, no mortgage and only thinking of 40K, with ~200K in equity, pretty much a lock in my opinion.

Yeah, he hasn't actually gotten it appraised. No real need to. He doesn't plan on selling at any time in the near future, or even distant future for that matter.

Rossman- I think I know what LTV ratio is, but I may be confused. Loan To Value would be say, the loan of $40k vs the value of the house ~200k. The only thing I think he has against him may be his DSR, but the two loans he has right now he wants to pay off with the Home Equity Loan.