I bought my house entirely in cash almost two years ago and I've never financed anything else—if I can't pay for it in cash, I don't buy it. The house I bought was a fixer-upper from a hoarder. While I assumed I'd have to tear it down, it turned out to be in much better shape than expected. I've already spent around $10,500 on repairs and clean-up, but I've hit a wall with the bigger projects that need to be addressed all at once rather than piecemeal. My credit score is just under 600 right now, and I bought the house for $30k. It's recently appraised between $120k and $140k, so I have 100% equity. I want a home equity loan (not a HELOC) to finance flooring, windows, doors, and HVAC upgrades since the current setup is over 40 years old and is eating up a huge chunk of my paycheck. Anyone have insights or advice?
3 Answers
That’s an incredible deal for a house! It’s bound to raise some eyebrows. Just keep in mind that even if you can get a loan, it might come with a higher interest rate since your credit score is below 600. I’m also curious—what's affecting your score if you haven't financed much?
Yes, it’s definitely possible! A lot will hinge on the current appraisal value of the house, which you've shared looks pretty solid with those recent numbers around $120k to $140k. Having 100% equity but a lower credit score may limit your options a bit, but considering your strong income and no debt, you might still find lenders willing to work with you.
I’d recommend reaching out to some banks directly! They can give you a clearer picture of your options. Also, check your credit report for any errors—sometimes you can fix minor issues quickly that could bump your score.