I’ve got $600k equity in my home and listed it for sale, but I need money to stay afloat until it sells. I tried getting a HELOC loan, but my monthly income is just $2k, so I was denied. Meanwhile, I’m drowning in $80k credit card debt. I really don’t want to file for bankruptcy… so how can I use some of this equity to help my situation?
How long do you think it’ll take for the house to sell? Is it already on the market? If it’s been listed for a while and isn’t selling, it might be overpriced. In that case, you may not have as much equity as you think.
Gotta ask—how did you end up with 80k in credit card debt? My concern is, if you sell the house and pay off the cards, what’s stopping you from ending up back in debt again?
Jin said:
Gotta ask—how did you end up with 80k in credit card debt? My concern is, if you sell the house and pay off the cards, what’s stopping you from ending up back in debt again?
I owned a business and had to use personal credit cards to keep it running.
@Darby
Got it, sorry to hear about the business. Maybe look into a 401k loan or, if you have an IRA, there’s a way to borrow from it, but you have to pay it back within 59 days. If you go that route, you might need to drop your house price a bit to sell it quickly.
I’m sorry, but how do you have 600k equity and only bring in 2k a month?
Lyle said:
I’m sorry, but how do you have 600k equity and only bring in 2k a month?
Business went under, and the house is fully paid off.
Lyle said:
I’m sorry, but how do you have 600k equity and only bring in 2k a month?
Business went under, and the house is fully paid off.
The issue with getting a loan is your debt-to-income ratio. Even if you pull out money to pay off your debt, the new mortgage will put you over the limit most lenders allow. You might need to sell the place, clear your debt, and rent something smaller until your income improves.
That’s my goal… hoping it sells soon.
The house is listed with a real estate agent, and the asking price matches similar homes in the area. I’m expecting it to sell within 90 days at most.
Try reaching out to a credit union for a personal loan.
You could get a cosigner for a loan against your equity. They might prefer to pay off your credit cards directly instead of giving you the money, but it’s a way to access some funds. You’d have to give them a lien on your home, so talk to your realtor about it.
I was in a similar situation and used Figure Lending to pay off some debt before selling my house. They don’t require an appraisal if you have a lot of equity and can move quickly. I got funded in less than a week. My income was higher than yours, though, so not sure how that’ll play out, but it’s worth a try since applying won’t hurt your credit.
Are you selling the house just to pay off the debt, or do you want to sell it anyway? It doesn’t seem like the best idea to sell a home just to cover 80k in credit card debt. There might be better ways to handle it without giving up the house.
Honestly, I’d just default on the 80k. How are you even keeping up with the interest and minimum payments?