East Bay Probates Real Estate Sales
  • Home
  • Probate
  • Contact Us
  • Probate Blog
  • Probate Videos
  • Conservatorship
  • Trust

No Home Equity Loans for Many Homeowners

7/6/2011

2 Comments

 
PictureHome Equity Loan Denied
In the paper today tales of home equity loans…Do you want a home equity line of credit (HELOC)? Odds are the bank is going to reject you. Banks have tightened on home equity loans seeing that many homeowners either have negative equity or not enough equity.

Yes. All those short sales and foreclosures are dragging values down. Your home equity is now worth half of what it once was, right? Sigh. (Some houses have dropped much more!!)

If you live in Nevada, Arizona, Florida, Michigan or California, there’s a one in three chance (1/3) that you’re underwater. Look around you. Every third person you see, their house is underwater or close. And those who are not homeowners, chances are one in three (1/3), they have too much debt. How about this? The house is under water and you owe a bunch. That’s the double whammy. Therefore, 33% to 66% of people in those states don’t qualify for a home equity loan.

What does it takes to get a home equity loan? You have to have equity. How much? A loan agent from a major bank said they want to see 20% equity remaining. If your house is worth $500,000, your borrowing ceiling is $400,000. You owe $250,000 let’s say, then the bank is willing to lend you up to $150,000. (Of course, your credit, FICO score, has to be very good, and they’ll check your employment, earnings, etc.)

Nevertheless, it’s hard to know what banks want…THEY don’t know what they want. It’s so risky these days. Bank’s say when nobody knows what’s happening with housing prices and people just walking away from their houses. How do they risk price these loans?

As a home equity line holder, my wife and I watch our bill closely and treat it carefully. We’re concerned that if we’re ever late they may increase the interest rate, cut us back or tell us we have to pay it off. Luckily we have equity, but we just don’t want to hassle with the lender.

Finally, if you want a loan, you need lots of equity, good credit, a job, low debt, and a good reason…like fixing the house, college education. Vacations won’t cut it.


Sale Confirmations Are Boring Sometimes

2 Comments
Find tenant link
7/9/2012 10:48:31 pm

Thanks for a marvelous posting! I actually enjoyed reading it; you will be a great author. I will always bookmark your blog and will come back sometime soon.

Reply
Vancouver mortgage link
9/23/2012 10:31:46 pm

I've looked information on this very subject and I'm happy that I've found it here. I'll be back.

Reply



Leave a Reply.

    Author

    Ernest is an experienced agent with Better Homes & Gardens in Oakland CA. This is his specialized website for probates.

    Archives

    May 2017
    February 2016
    January 2016
    October 2015
    September 2015
    May 2015
    December 2014
    July 2014
    May 2014
    October 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    August 2012
    June 2012
    November 2011
    July 2011
    May 2011
    March 2011
    February 2011

    Categories

    All
    Court Confirmation
    Court Confirmation Sale
    Court Process
    Earnest Money Deposit
    East Bay Probates
    Estate Planning
    Foreclosure
    Home Equity Loan
    Investment
    Investors
    Living Trust
    Living Trusts
    Oakland Ca
    Oakland Realtor Probate
    Oakley Probate
    Probate
    Probate Appraisal
    Probate Conservatorship
    Probate Listings
    Probate Referee
    Probate Sale
    Probate Sales
    Probate Sales Berkeley Oakland San Leandro
    Real Estate
    Residential Income
    Short Sale
    Walnut Creek Probate

    RSS Feed

Powered by Create your own unique website with customizable templates.