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Can I consider a home equity loan in my circumstance?

I own a condo (valued between $70-75K) free and clear. I am doing improvements to it as I can but, now, my car has reached the point that it cannot be improved and I'm trying to evaluate my options - one being a home equity loan.

The issue I have is that I became sick over ten years ago. After going back to work three times, I became unable to work. I am on social security disability now but I went four years with between no and minute income, losing nearly everything I'd worked for all my life, including my home. (I was a single parent and, yes, I had disability insurance but - FYI - they can just say "Our doctor thinks you can work" without ever having seen you and deny your claim.) As a result, my FICO can't be higher than 600. I don't currently have any debt and my net monthly income is around $1500.

Should I consider taking out a home equity loan of between $15000 and $25000 in order to purchase a reasonable car, get the home improvements done sooner rather than later and take care of some medical needs - if I even can, given my income and credit history (shady foreclosure was in 2006). Are my chances better financing a lower or higher amount?

My other options are to buy a beater or pay outrageous interest for a decent used car. Appreciate any insight!
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July 12 2013 - Metro Center
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Answers (4)

The equity line and the car loan are both good options.  You need to start with getting information on what rate and terms the HELOC would have as well as rate and terms for the car loan.  What is nice about the car loan is that is will be paid off at a certain time in the future where as a HELOC does have options to make them fixed they usually stay at an interest only payment and can act the same as a credit card and people have trouble ever paying them off.  Just things to think about.
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November 10 2013
Tricky situation..  The heloc seems like the path of least resistance, but it might be worth contacting a dealer to see about financing options.
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November 05 2013
Profile picture for Karen with Glasgow
Many dealers have very low interest rates on new cars. Especially now that they are trying to clear their 2013 stock to make room for the 2014 cars.  My Honda loan has an interest rate of 0.9%.  I would contact several dealers and see if you qualify for a low interest car loan. 
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August 02 2013
 A car is never a good investment as they depreciate, but if you need it to get from point a to b it doesn't need to be nice. You could always sell your condo and cash out to rent month to month.

An equity loan is probably your best bet just take what you need.
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July 13 2013
 
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Can I consider a home equity loan in my circumstance?
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November 10 2013 | 4 answers
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