Home Equity Line of Credit Loan (fixed rate, real estate, heloc, rate) - Mortgages -Lenders, loans, financing, rates, foreclosures, short-sales, brokers, credit score, deed, lien, refinancing, borrowers - City-Data Forum

bluecomet · 11-08-2013, 02:53 PM

We have a home valued at $395,000. Have been unable to sell because of dated counters, flooring, etc. No 1st mortgage. But we have a Home Equity line of credit of $29,000. We have no funds to upgrade home. Our lofe savings is our home equity. Home equity line of credit rate is 8.0%. We are trying to sell. Can we get a fixed rate home equity loan and get additional funds to upgrade our home. If so, what rate should we expect on the fixed rate home equitl loan. We have excellent credit! Need to downsize. Any recommendations will be appreciated.

chet everett · 11-08-2013, 04:36 PM

Quote:

Originally Posted by bluecomet

We have a home valued at $395,000. Have been unable to sell because of dated counters, flooring, etc. No 1st mortgage. But we have a Home Equity line of credit of $29,000. We have no funds to upgrade home. Our lofe savings is our home equity. Home equity line of credit rate is 8.0%. We are trying to sell. Can we get a fixed rate home equity loan and get additional funds to upgrade our home. If so, what rate should we expect on the fixed rate home equitl loan. We have excellent credit! Need to downsize. Any recommendations will be appreciated.

Without more info it maybe EXTREMELY UNWISE to attempt to borrow money to "update" your home to make it "more sellable".

First it really makes no sense that you would have a HELOC at 8% -- the well know Bankrate.com currently list rates at HALF that even for folks with less than stellar credit / smaller borrowed amount...

Second you say your "life savings is your home equity" and with no mortgage and home "valued at $395,000" that would seem to be a pretty healthy amount of equity even assuming you do have $29K borrowed against that equity.

If you sold your home at what it is valued at you would net well over $350K.

Now it is very important to understand a) what leads you to believe your home is truly worth $395k if you have been unable to sell it b) what leads you to believe that the dated counters and flooring are preventing the home from selling.

In my experience it is extremely unlikely that updating things like flooring and countertops will magically make buyers pay more for a home.

Before I would spend anything on updating the home I would get detailed comparisons of homes that have sold nearby and try to compare the condition of those homes to your own. Even if those homes do have newer flooring and countertops I would be very surprised if those are the only differnces. If they are located in a quieter part of your neighborhood you cannot change that. If they have mature landscaping it is very hard to reproduce that. If they sold their homes when rates for mortgages were setting records for affordability that may have contributed to their selling more quickly. If they came on the market all cleaned up and well staged that likely made a first impression on buyers that you cannot hope to recreate.

If you have gotten offers that were below your asking price but reflected cost to replace counters or flooring why did you not accept those offers?

If you have recieved any offers I can almost guarantee there are more problems than just flooring and countertops...

thelopez2 · 11-08-2013, 06:15 PM

How much do you think all of the upgrades will cost? Do you have any income. Is your 29,000 line of credit your balance or what is available? How do you intend to down size, rent after you sell?

You can try dropping the price of the home the expected price for you to upgrade. If you are not doing the work yourself , you might send $10k. If you do do this route of upgrading add 30% over what you expect to pay.

To me , it sounds like the home has more value than the land. If you go cheap , you might hurt yourself in trying to sell.

willow wind · 11-09-2013, 08:33 AM

Your home can't be valued at $395,00 if you can't sell it because it's too dated. That means your home is valued at $ 395,000 ONLY if it has been modernized/ updated.

Get a few real estate agents in to speak the truth to you. You want to know where to price your home to get it to sell " as is". If you have an agent, then listen to that person and price your house appropriately.

There's no point in taking on a loan to spend tens of thousands of dollars upgrading kitchens, bathrooms, flooring, just so you try to reach some magical $ 395,000 value. By the time you pay back the loans, you're back to your " as is", original value. What's the point of that ? Better to sell for what the market will pay and stay away from the loans. It's all profit to you.

Hemlock140 · 11-09-2013, 11:18 AM

Despite what you see on HGTV spending $20,000 on upgrades to your house doesn't always mean an increase of $60,000 in value. There are far more variables such as location, quality of schools, layout of rooms, size of lot, and simply whether it's considered a desirable area for buyers. You could end up wasting a lot of money doing all that work and still not being able to sell it. Keep in mind that the home equity line of credit is what caused the big burst of the housing bubble, as people borrowed on equity that they lost when values fell and became under water. My suggestion is to lower the asking price as much as you have to and sell as-is, let the new owners do the upgrades, and just set your sights a little lower on the new home.