Posted by Jim IL on May 06, 1999 at 14:54:14:
Not being a lender, I cannot say what factors exactly they will look at. I’m sure credit worthiness, debt to income ratio and equity in the property being used for collateral are all factors.
The debt to income ratio may be less of a factor, since the purpose of the loan is to “Consolidate” the debts and make ONE payment, that will usually be less than the multiple payments to creditors.
Not too mention the fact that the payments made on the “equity line” are tax deductible. (at least the interest portion)
I just know from my own experience that when I went to get an “equity loan” for “debt consolidation”, the lender made out checks to me and the creditor I was to payoff. I just signed them and sent them off to the various credit card companies.
The remaining amount in the loan was left untouched and I simply had to write out checks from the “Equity line” to access it. (I wish I had that money now, thanks to REI I now know “what” would be a better way to use it!!)
Thats my story and I’m stickin to it!