Home Equity Loan

Bad Credit Equity Loan?

My FICO is about 560 and I have a little over 20% equity in my home. I have been offered a refinace, but the terms really scare me. My financial situation would be much better served with an equity loan than this refinance. The closing costs take up too much of the amount I'm borrowing and it's an adjustable rate mortgage that starts more than 3% higher than my current mortgage. Any suggestion???

Public Comments

1. The refi sounds horrible. An adjustable rate #% higher than your (assumedly) fixed rate? FYI, the chances of an adjustable rate adjusting downwards in the near-middle term future are pretty low. If you really need a loan, shop around for the HELOC. Don't know your chances with you credit score, but anything is better than the refi you described.
2. Dont get sucked in to that deal,shop for a heloc..and please stay away from citicorp..they will haunt you and hunt you down at work,and don't ever use your cell phone,they will re-dial it for life!!They will harass to no end,even if you are a day late.can't wait to get rid of those people.
3. please contact a few more before finalising, otherwise you may fall for a debt-trap
4. I found lots of good information here.
5. Yes, work with a mortgage lender that will not try to rip you off!! By you saying the closing costs are to high, and a rate that is 3% higher, it sounds like you are being raked over the coals!!! I work with Providential Bancorp, a nationwide mortgage lender based in Chicago Illinois. We have programs with minimal closing costs, and guarantee to give you the rate you qualify for.. We bank our own loans here, so we have a vested interest in getting more business for the loan term.. A brokerage sells your loan within 30 days of closing.. Their interest is to give you the highest rate and closing costs they can to make money in the short term.. They will not service the loan, so it means nothing to them if you refinance out of the mortgage a year later... (they already made their money) Our company wants long term relations with clients happy to be in the mortgage they are.. If not, we lose the business of collecting interest monthly.. WE DONT NBEED TO OVERCHARGE YOUR RATE TO MAKE PROFIT, YOU GET WHAT YOU QUALIFY FOR.. Being that 90% of mortgage companies out there are brokers, you dont find deals like what we offer often.. This is why i post responses on sites like these. I see many other broker responses, but they never can offer the programs that my company can..(i've tested it many times) I can say that an equity line is probably not your best option... With ever so rising interest rates, and the fact that an equitl line is a revolving debt (credit card, compounded interest loan) you would hurt yourself more then it will help.. Being that a heloc is a revolving debt, it shows on your credit as a giant credit card secured against your home.. Plus, you pay different interest then you pay on a mortgage or car loan (simple interest) Comounded interest (credit card, heloc) means you are paying interest on top of interest on top of interest... With a mortgage, you will not hurt your credit any more, and you also will save alot of money in unecessary interest payments.. My name is Jason Fry, i'm a licensed mortgage loan originator. Feel free to call me at 312-264-6448, or email me at jasonf@providential.com thanks, and good luck! Jason Fry