Investor · Litchfield CT · Member since 2025 · 3 posts · 0 votes
So my credit is ****ed from old credit cards, but I have the option to pull equity from my owner occupied 2 family to repair it....planning on putting on an addition to current house and converting the garage to a rental.. I'm looking for opinions on options that I may not be seeing? If I take the ****** rate and pull all of my equity I can struggle for 6 months until I can refinance or streamline once my credit rebounds? Only other option I can think of would be to pull just enough to pay off bad debt to boost score then do another home equity loan when my credit goes up?? Might be a lot more costly
Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
1y
I strongly recommend going through a full loan workup with a knowledgeable lender prior to pulling the trigger on anything. The last thing you want to do is load up on short term debt and then not be able to refi at all when needed. Cashout refi's are tough to execute with poor credit, and there is no guarantee that paying off old trades with bad history will improve your score.
I would suggest patience, get your budget, credit score and DTI under control before adding to it with more debt. Reduce expenses and increase income to set yourself up with the discipline to succeed.