Home Equity Question (loan, foreclose, credit card, loan)

[NYGirl1002]

I've lived in my town house for 2 years now and I have no mortgage. I have occurred some credit card debt and I just applied for a small HE loan in order to consolidate my debt. I have a high 600 to low 700 credit score. I've been able to pay off these cards however I'm tired of paying $25 each month APR.

I applied in February and the credit union was taking forever. Like they wouldn't let me know until a week after I sent them documents if they needed more documents or if one was not sufficient. It was like pulling teeth.

On April 2nd I lost my small job (I worked 15 hours a week from home). My last paycheck was dated April 6th. Last Friday I was finally informed that I was clear to close but they wanted a paycheck. Sure enough the last one was not sufficient so I sent a report from unemployment showing that I receive the same amount I made when I worked. I'm 67 years old so there's no way I'm going to get another job.

I was denied because they can't accept an unemployment record. I thought a HE loan had to do with the equity in your home. I also have 3 savings accounts which I showed them.

Is there any way I can appeal this decision or am I screwed?

[uhuru]

OP, I don't believe you will be successful with any appeal given your current employment status.

What a lender looks for is that their loan will be secure and that the underlying collateral is sufficient to cover the loan. Your situation seems to satisfy that requirement given the equity you have in the house.

But the other thing that a lender looks for is whether you are able to make the payments on the loan and that would be a concern for any lender given your employment status. Lenders are looking for the loans to be repaid. They are not looking to foreclose on a property in case a borrower is not able to make the payments.

[SmartMoney]

Lenders are now required to show you have the ability to repay the loan. Even though a home equity line is not subject to the new mortgage rules, the mood is definitely focused on not setting someone up to lose their home due to non-payment of a mortgage. Without known income, it's high risk. Unfortunately, unemployment income is temporary.

[thelopez2]

Aren't you going to get social security as income?

[NYGirl1002]

Yes I do collect social security and I reported it to them