[Get a home equity loan without a mortgage?]

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Redgypsy61
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Joined: Tue Sep 28, 2021 12:47 am

[Get a home equity loan without a mortgage?]

Post by Redgypsy61 »

Ive read all the posts in [viewtopic.php?f=2&t=358882], and I have a quick question. I’m a complete dummy when it comes to money and owning a home. My home is paid off, 33,500 cash and paid it off when I bought it. But now after 8 years of owning it. It says the total value is 82,800…. So, basicly I can’t take out a home equity loan, for repairs and upgrades because I dont have a mortgage. I have no income and still waiting for my SSI. Now after doing a lot of trying to read up in home equity. I still basicly don’t own my home because no matter if it’s paid off or not you still have to pay a property tax… so paying cash and paying off a home from Jump was a bad idea on my part, and now I’m stuck with not being able to upgrade, get a home equity loan, it’s all so confusing to me. I wish I knew more about what I could do to just get out from underneath it all.

[split from Annual cost of owning a home is 4% to 6% of the value of the house - admin alex]
niagara_guy
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Joined: Tue Feb 11, 2020 7:32 am

Re: [Get a home equity loan without a mortgage?]

Post by niagara_guy »

During the financial crisis in 2009 I asked my credit union about a home equity line of credit, they would not do it since I didn't have a mortgage. I did find a local bank that did give me a home equity line of credit but I had to search around to find a bank that would.
Dandy
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Joined: Sun Apr 25, 2010 7:42 pm

Re: [Get a home equity loan without a mortgage?]

Post by Dandy »

If you own your home you don't need a mortgage to obtain a home equity loan or line of credit. You need sufficient income and credit rating as far as I know. I don't have a mortgage and have a home equity line of credit (HELOC).
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samsoes
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Re: [Get a home equity loan without a mortgage?]

Post by samsoes »

Paid off my mortgage in 2014.
Obtained a Home Equity Line of Credit (HELOC) in 2016 without having a mortgage.
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Admiral
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Re: [Get a home equity loan without a mortgage?]

Post by Admiral »

Welcome!

First: you own your home. Property taxes are unavoidable, but that doesn't negate your ownership. If you are low income, many (most?) counties will reduce your taxes to some degree, but you'd need to investigate that locally.

Second, a home equity line of credit is just what it says: it's credit based on your equity. If you own the property outright, you have 100% equity. That said, whether a lender will open a line of credit for you (and how much it's willing to lend) may be based on other factors, like earned income and other assts. Their interest is in being paid back, not in taking your home and selling it to pay your debt. If your home is worth $100k, your loan amount is likely to be fairly low, but it's unclear how much you require.

A lender may want an appraisal of your property, and they may also want to see other assets (bank accounts, stocks) to make sure you're a good credit risk. If you're not (or deemed to be not), then they will either reject your application, or increase your borrowing costs.
slickracer
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Re: [Get a home equity loan without a mortgage?]

Post by slickracer »

I've been in banking for 27 years and never heard this. I have two HELOCs on my home with no mortgage.
Parkinglotracer
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Location: Upstate NY

Re: [Get a home equity loan without a mortgage?]

Post by Parkinglotracer »

I think the no income will be the problem with any substantial loan from anyone. Maybe a reverse mortgage is a last resort if money is required to live.
flyingcows
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Re: [Get a home equity loan without a mortgage?]

Post by flyingcows »

I had no issue getting a HELOC for our paid off home, there were no fees to set it up, rate is prime minus 0.5%, 10 year draw period. It also has an option for us to convert it from a revolving line of credit into a 20 year fixed rate loan in the future if we would like to.
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l8_apex
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Joined: Fri Mar 08, 2019 9:57 am

Re: [Get a home equity loan without a mortgage?]

Post by l8_apex »

Original poster - is your home a mobile home? If so, I know many banks exclude those in their lending standards.
calwatch
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Re: [Get a home equity loan without a mortgage?]

Post by calwatch »

Some states also have property tax postponement programs for disabled or those with low income. I would investigate to see if it applies to you.
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