Which comes first: home equity line of credit or modification?
Hi, I am confused and need some advice. I started an application to get a home equity line of credit to consolidate debt. This will help a lot because I have a huge amount of debt and all the individual monthly payments are killing me. Consolidating will bring that payment down some (and make it into one payment) and it will also be a lower interest rate than my current debts.
The catch is that I also started an application to modify my mortgage while in the process of researching and applying for this HELOC. I have a permanent hardship that has led to the need to modify.
Am I correct in thinking that I need to get the home equity line of credit FIRST, then do the request to modify my mortgage? Is it correct that a HELOC will be near impossible to get if I do the mortgage modification first?
Also, if I go for the HELOC then will I not be able to get the modification on my first mortgage at all (like will that alter something to where I can't get that sometime down the line)? I feel like having both will completely remedy the situation I've found myself in, or at least make it manageable, but I want to make sure that I do this in the correct order so I don't jeopardize getting either of them. Also, if anyone thinks it's a better idea to just do the HELOC (it's fixed rate and the payment will be the same for 20 years) and wait on the modification then I want to know that too.
Some extra info: I am not behind on my first mortgage....YET. I decided to ask about the modification now because with things how they currently are I can see it all headed that way. The HELOC would resolve the extremely high monthly payments I have with other debts though and probably make my first mortgage affordable. However, if anything else catastrophic happened down the line I would absolutely need the option of the modification, so I don't want to do anything to jeopardize my chances in getting a modification. My problem is that I can't figure out if a HELOC would jeopardize that.
I hope this all makes sense. I know it’s a lot of information, but I appreciate any advice. I DON’T want to sell my house because I won’t be able to find another in this area for a reasonable price, and I must stay in this area for medical stuff. I also would prefer to avoid considering bankruptcy since Tennessee doesn’t have a very big homestead exemption. I will definitely lose my house if I file for bankruptcy, so I’m looking for another way to resolve things to where things are affordable.