Home Equity Loan Advice for a Finance Moron

[Michael Davis]

Guys,

I am trying to sell a house in Michigan that has been on the market for quite awhile. The house is entirely paid for but unfortunately I have very little liquid cash. A few months ago, the house suffered some serious damage which I must pay for and I need to get a loan of 10k.

I have made very little money over the last two years and don't have a steady job. I do have a decent bankroll that I don't want to tap into but I'm not sure how that could possibly help since I'm already asking for a loan.

What's my play?

Thanks.

-Michael

[spider]

What exactly is the question?

I'm not real sure how tough it would be to get a home equity loan but even without a job, I'd imagine you could get a loan fairly easily if it's for a small amount relative to the house value. I.e. I'd think someone would be happy to loan you 10k on a 100k house even if they thought you'd default. Hell, they'd probably root for you to default.

However, the main benefit of a home equity loan is the tax deductibility. But if you aren't currently itemizing deductions and only intend to get a small loan, this benefit may be small or zero.

In which case, just put it on the credit card, assuming you'll be able to sell the house soon and pay off the credit card after that.

[pig4bill]

Tap the bankroll and put playing on hold if necessary until the house sells.

[VeryTnA]

I can do NINA loans for 50% LTV. NINA= No Income No Asset. That helps with your job / income situation.

Minumim loan amount is 50K.
Don't have the matrix in front of me, but pretty sure there is no prepay penalty.

Take the 50K, complete your repairs then make a lump sum re-payment with the excess cash. Or just consider it early proceeds from the sale.

Talk to your tax guy, but there may be some other tax advantages to pulling some equtiy out before the sale. You should be able to deduct all the repair expenses.
Again, talk to your tax guy.

PM me if you want to look at the NINA.

[pig4bill]

OP, don't forget to ask about ALL the closing costs and how long it will be until you have the cash in hand. When you get the answers, I think you'll want to temporarily tap your bankroll.

The tax advantages amount to being able to deduct interest and fees that YOU have to pay in the first place.

[Michael Davis]

Thanks for the advice guys. Essentially, my question was just what should I do, get a home eq. loan, a mortgage, put it on the credit card, or just pay it and get a job. Thanks again for the advice.

-Michael

[AggroFish]

HELOC, if you just need the 10k.