How To Access Equity With Low credit Score and High Debt To Income Ratio?

[Andrew Jones]

We have a property that is worth around $140,000 and we owe around $45,000 on the property. We tried to get a HELOC but the bank denied us because our debt to income ratio and credit score were not good. Any advice on how we can access the equity in our property?

[Mike Grudzien]

Quote from @Stephan L Schnaiter:

Depending on how low the score and what you intend to do with the equity, it might be worth considering an FHA cash out refi to pay down debt at closing, solving the DTI issue in the process. FHA often has a more generous tolerance for credit scores and DTI than a HELOC might. Obviously, you will want to consider carefully whether you want to roll your consumer debt into your home, whether the new payment is beneficial, and whether you are able to not incur further consumer debt after the refi is complete.

I agree with Stephan.  Good breakdown to solve the immediate issue.  BUT big picture: work on that credit score and DTI.  Opportunities and deals come along all the time, but you need to be prepared to pull the trigger.