Mortgage or Equity Line of Credit....& School....loan questions....

[BC_Girl]

I have a couple questions...

First off let me give you a brief background on my history. I screwed up my credit royally while going to University (5-6 years a go) (those lovely credit cards they give you when you first start) not that I am blaming them it was my own fault for using them but I can't believe how EASY they are to get when you have no income I've messed up my student loans (about $40,000) and school....was put on academic probation and so on. I've slowly been working away at paying off all the consumer debt and have about $9xx left! I can see the light at the end of the tunnel. My elderly father recently put me in joint tendency on his property (he owns it out right) and is okay with my bf and I taking a mortgage against the place to get a prefab home. Now here are my questions...


1) Are we better off getting a mortgage?

2) Are we better off getting an equity line of credit?

3) I also want to go back to school and am not sure if I should be taking a student line of credit or wrapping this into the mortgage?


The problem I see with wrapping the education money into the mortgage is the interest I'd be paying on it over all.

[save_girl]

How is your credit? How long ago were you missing payments, etc.? Are you actually able to get a mortgage or HELOC?

I think they first thing you should do is go to a bank and talk to them about your options, see if you can get a pre-approval, and what kinds of rates they will offer for each situation if they will. You can shop around for the best rates later, but start off by being sure this is something that you can get approval for and something that you can handle, and get an initial feel for the different rate options. If your credit is not credit you may not get the best rates.

As well, what is your comfort level between fixed or variable rates? LOCs are almost always variable.

Do you feel sure you can have a LOC now without abusing it? It is nice to be able to take out only the money you need at that point, and pay it back as quickly as you like without penalty, but the temptation will always be there to max it out which you can't do with a mortgage.

[BC_Girl]

How is your credit? How long ago were you missing payments, etc.? Are you actually able to get a mortgage or HELOC?

Thanks for the reply My score is just over 500,so poor. It's been at least 4 or so years. I've been plugging away at it all.

I am not certain but with the equity in our place and my father cosigning, and my bf has a good job and owns has a mortgage...isn't that a help?


I think they first thing you should do is go to a bank and talk to them about your options, see if you can get a pre-approval, and what kinds of rates they will offer for each situation if they will. You can shop around for the best rates later, but start off by being sure this is something that you can get approval for and something that you can handle, and get an initial feel for the different rate options. If your credit is not credit you may not get the best rates.

I went and spoke to a bank the other day and they said they only consider 5% of the land for equity so I am now looking at other avenues.

As well, what is your comfort level between fixed or variable rates? LOCs are almost always variable.

I really don't know much about them honestly, I am just doing my research now.

Do you feel sure you can have a LOC now without abusing it? It is nice to be able to take out only the money you need at that point, and pay it back as quickly as you like without penalty, but the temptation will always be there to max it out which you can't do with a mortgage.

Absolutely, I've been living VERY frugally and on budget for the last two years and have learned to live on next to nothing. I follow Gail Vaz-Oxlade's budget and ways of living

I totally see what you're saying and that's why I am not sure which is a better option to go and if I should be combing the school loan/line of credit with the home?

[Natalka]

I don't think it's fair of you thinking to take a mortgage out against your dad's home.

Clear up the debt you have - rent until then. Be independent.

Don't beat me up over the advice, it's my opinion.

[BC_Girl]

I don't think it's fair of you thinking to take a mortgage out against your dad's home.

Clear up the debt you have - rent until then. Be independent.

Don't beat me up over the advice, it's my opinion.

I live with him and he's elderly and wants us to be set up before he goes with our own place on the land. And we co-own it so it's not an issue with he passes.

I'd love to be independent but he kinda needs me around.

I am not going to beat you up over this, everyone's entitled to their opinion and I appreciate hearing what people have to say.

[Natalka]

K, you didn't mention that before about staying with your dad. That's absolutely wonderful. So stay with him, take care of him - bless your heart for doing so.

But, honestly, clearing up your debt is what I meant about being independent, before you get into financial dealings with a boyfriend.

[mrsfd]

jUST SOMETHING YOU AND YOUR FATHER SHOULD BE AWARE OF.....
IF, not going to say you will, default on or get behind on you bills, the banks, the credit card company & even Revenue Canada WILL TAKE THE PROPERTY, kick you out, & sell the property at auction TO SATIFY THE DEBT. Even though you co-own it, it is considered an asset and they CAN & WILL TAKE IT.... BE VERY CAREFUL.
I have seen this happen!!

[BC_Girl]

K, you didn't mention that before about staying with your dad. That's absolutely wonderful. So stay with him, take care of him - bless your heart for doing so.

But, honestly, clearing up your debt is what I meant about being independent, before you get into financial dealings with a boyfriend.

Thanks, I'll never leave if I can help it

The debts pretty much cleared up, I've come a long ways in dealing with it. And the bf's been around forever 10 years so we just kinda figure this is our next step in life to move forwards. We aren't getting any younger

jUST SOMETHING YOU AND YOUR FATHER SHOULD BE AWARE OF.....
IF, not going to say you will, default on or get behind on you bills, the banks, the credit card company & even Revenue Canada WILL TAKE THE PROPERTY, kick you out, & sell the property at auction TO SATIFY THE DEBT. Even though you co-own it, it is considered an asset and they CAN & WILL TAKE IT.... BE VERY CAREFUL.
I have seen this happen!!

We know that, thanks though....it was a chance he was willing to take in making sure his wishes were followed through by whom he wanted to leave his assets to.

This is part why I want to go back to school asap, so I can get a better job and make sure this doesn't happen!

[save_girl]

Honestly, your credit is pretty bad and they are not offering you much in equity. Do you really need to do anything with a mortgage now? Maybe you should just take out a student loan or line of credit (which you will probably need a co-signer for), focus on school and getting a better job and some more time passing to improve your credit. The mortgage or HELOC doesn't look like a good option for you at the moment.

Combining the loans is good if you get the best rate that way, but it doesn't look like you are getting good rates right now either way. Having a smaller loan that you pay back as scheduled will improve your credit and improve your relationship with the bank (which they often consider in addition to your credit score).

[MortgageQueen]

I don't mean to get personal, but is your relationship with your boyfriend "ultra" stable? because in this situation, it could get Very messy if you broke up.
That said, there are ways to go about this. I'd need to know what your land is worth. (you can PIN me if you like) That would be a place to start.
My best advice to you though is to talk to a morgage broker. If you tell me where you live in BC, I can give you a referral.Probably, you would use BF as primary applicant and you secondary.
You can also get help from your broker to get your credit rating improved.

[BC_Girl]

I don't mean to get personal, but is your relationship with your boyfriend "ultra" stable? because in this situation, it could get Very messy if you broke up.
That said, there are ways to go about this. I'd need to know what your land is worth. (you can PIN me if you like) That would be a place to start.
My best advice to you though is to talk to a morgage broker. If you tell me where you live in BC, I can give you a referral.Probably, you would use BF as primary applicant and you secondary.
You can also get help from your broker to get your credit rating improved.

That's fine, I understand this is kinda a personal topic. Yes, I'd say it defiantly is.

The land is worth $530,000. I'll pm where I live My bf can be the primary applicant even though he's not on the property title?

Thanks! I appreciate you taking the time to answer my questions

[poppleton]

I live with him and he's elderly and wants us to be set up before he goes with our own place on the land. And we co-own it so it's not an issue with he passes.

I'd love to be independent but he kinda needs me around.

If you're living with him because he needs assistance, and your bf has his own home (you mentioned he has a mortgage) why the rush to buy another place? I would personally never put someone else's property on the line, but that's just me . Perhaps it would be better to finish paying off your debt, cash flow your schooling, and then if/when the property becomes fully yours, you could sell it and purchase another property? It's a wonderful thing to be debt-free

[BC_Girl]

If you're living with him because he needs assistance, and your bf has his own home (you mentioned he has a mortgage) why the rush to buy another place? I would personally never put someone else's property on the line, but that's just me . Perhaps it would be better to finish paying off your debt, cash flow your schooling, and then if/when the property becomes fully yours, you could sell it and purchase another property? It's a wonderful thing to be debt-free

He doesn't directly need assistance yet. He's still quite active for his age, I just like to be able to look out for him and really enjoys it and the company We'd either be selling the bf's place or keeping it as a rental (whatever we're advised by a financial adviser to do). We are just ready to start our life together. I wouldn't either, except that was why my Father put the property in joint tenancy. I won't ever sell it if it's up to me, this is where I grew up and where I want our future children to grow up, as does my father.

[Shwa Girl]

Don't think you will like my advice. Here's my 2 cents worth.
1) Are we better off getting a mortgage?

You are doing good paying off your debt. Don't add more now. After your debt is paid, build up an emergency fund and save 25 per cent down for a home.

Live debt free for now.

2) Are we better off getting an equity line of credit?

Stay away from credit for now. Clean up the old stuff. Have some cash money saved. Use credit as a last resort.

3) I also want to go back to school and am not sure if I should be taking a student line of credit or wrapping this into the mortgage?

How about paying for school one course at a time, towards your certificate, diploma, or degree? How about working full time and taking courses part time, online? Does your employer offer tuition reimbursement? If so, stay there and take advantage of this offer, until you finish your degree.

With online, tuition and transportation will be cheaper. You can continue paying off your debt. You already have a place to live.

Applied for scholarships or bursaries?

Hope this helps.

[BC_Girl]

Don't think you will like my advice. Here's my 2 cents worth.

I appreciate everyone's advice

1) Are we better off getting a mortgage?

You are doing good paying off your debt. Don't add more now. After your debt is paid, build up an emergency fund and save 25 per cent down for a home.

Live debt free for now.


I'm going to be living where I am now, I won't be moving. I don't want to move away from my father which is where my questions came from.


2) Are we better off getting an equity line of credit?

Stay away from credit for now. Clean up the old stuff. Have some cash money saved. Use credit as a last resort.

I hear ya there.


3) I also want to go back to school and am not sure if I should be taking a student line of credit or wrapping this into the mortgage?

How about paying for school one course at a time, towards your certificate, diploma, or degree? How about working full time and taking courses part time, online? Does your employer offer tuition reimbursement? If so, stay there and take advantage of this offer, until you finish your degree.

I could go to school one course at a time but the program I want to take they don't offer that way, it's all or nothing. It's a 10month program and I'd be done and be able to get a much better job and make more money. I am self employed so no I don't offer tuition reimbursement.

With online, tuition and transportation will be cheaper. You can continue paying off your debt. You already have a place to live.

Exactly why we want me to go to school now and get that out of the way so I can get a better job to contribute more to our household.

Applied for scholarships or bursaries?

I've tried and I didn't qualify for anything.

Hope this helps.

It all does.