I bought a house cash with life insurance money to get out from renting. I have the house in an LLC to protect from possible liens and other issues. I now want to use some equity for some medical needs not covered by insurance, pay off a very high-interest car loan, and fix up the house a bit. I need a loan for about 50K or so. I have been in touch with a loan company that offered 100K at 2.25% for a 15-year loan. I don't need that much for my medical, bills, and fix up, but they said that is the minimum loan amount. But I wonder if there is a way of putting that balance (50K) to work for me. House is valued at approximately 250K right now. I bought it for 200K 3.5 years ago.
My credit is not great, but I have been working on it for over a year now and it has gone up over 100 points so far. I would like to use some of the equity to invest in more real estate if that is even a wise option. Not sure what to do or where to turn. I am 55 years old and alone. I am disabled, so my earning potential is a bit limited so I would like to put my asset to work for me. Any and all suggestions are greatly appreciated.
Hello and welcome to the BP community. If I were you I would call another bank and tell them you want a HELOC - Home Equity Line of Credit. This means you can take out as little or as much as you would like from the amount they qualify you for. If you got through the other loan application you should be fine at a bank. Don't let the first bank give you more money then you need.
Another alternative is to see if there is any prepayment penalty on the first offer. You can always take the 100k and then return 50k of it to them the next day after closing so you don't have to pay all that extra interest for nothing.
You could also keep that 50k and invest it sure just if you do decide to go down that route really do your homework to make sure you wont lose it. Good luck with whatever you decide to do!
Thanks for the reply, Dan. There are no prepayment penalties, I already asked. What is the best way to invest the 50K?