I get “pre-approved” offers all the time for home equity lines of credit. Silly me, I went to My Personal Banker (snerk) without having received an offer from them. After 9 weeks (I am not kidding), they told me that my debt to income ratio was too high and I was denied.
OK, first question - is HELOC eligibility based on income? I own 2 homes with approximately $120,000 equity combined. I have a Morgan Stanley portfolio. I pay my bills on time. I have credit cards, and I would like to pay them off as soon as possible due to higher interest rates. What I don’t have - a job. Technically, I am employed. However, since my auto accident the end of April, I have worked very little and will be off work another 2-3 months after my hip replacement surgery. I didn’t think I was applying for a loan, just access to my equity. So is the job thing a deal breaker here? I am looking for about $30,000, far less than the equity in my main residence.
Second question - worst case scenario is refinancing. But, honestly now, wouldn’t I be turned down for that too because of no income?
Do only people with lots of spendable income qualify for a HELOC? Sorry, that doesn’t make sense to me. The Morgan Stanley is a retirement thing which I hesitate to touch. It isn’t making me big dividends, but somehow I need to whittle down my high interest credit balance - my gut says leave Morgan Stanley out of this.
I thought this should go in GQ, since I am looking for facts about how home equity lines of credit are approved. Thank you.