Last chance to apply for credit lines?

Question

With all the Coronavirus inspired loans, backlogged refinance applications, and stalled mortgage applications for purchases, are lenders still taking applications for personal lines of credit?

I feel like they may just deny them for now out for necessity, but I'm worried that it may be much harder to get loans in the near future for investors.

(Side question, for newbie- is it a bad idea to have a line of credit as extra reserves in a time like this?)

Fred Shatzoff · Answer

My lenders are lending no changes. It is always a good idea to have a line of credit or a heloc on your home for emergencies. This is certainly an emergency. Let's be positive things will work out. That is my opinion everyone has to do what they feel comfortable loans will close. It may a little bit of a delay with appraisals. Lenders and loan officers need to be pro active more than ever. I have an appraisal that was supposed to me sent last night and it was not. I read him the riot act.

Pete Storseth · Answer

I'm considering a different approach. I think I'll market on social media for deals and cold call some landlords since people are supposed to be at home in quarantine. I'll try to find good deals and possible seller finance deals that I could wrap instead of rent. If the timing works out perfectly, people will really need loans and of the lenders are locked up, I could help them out. Still may be good to have reserves for those deals though. I'm hoping that if things aren't returning to normal, I can be of service to those in a bind. And for my effort, God and karma should work to my favor.

Joseph Cacciapaglia · Answer

It's certainly not too late to try. However, it's dangerous counting on your credit line as a "reserve". Even if you are approved today, they can cut your line tomorrow or next week if things get worse. I experienced this personally in the last downturn. If you feel you need the credit line for reserves, I would suggest drawing it down as soon as you are approved. That way you actually have a cash reserve. Sure you'll pay interest for on it, but to me it's worth it to have some actual security. Of course, do the math, and be sure it makes sense for you.

Pete Storseth · Answer

@Nathan LalondeI think you posted on the wrong thread

Nathan Lalonde · Answer

Timothy Hero Specialist replied 11 days ago 0 votesNo votes yet The virus isn't going to effect the housing market. It's not even effecting the stock market. It's the media doing this.Wow. This being your comment from a previous thread seems to be contradicting your own comment in this current thread. To bring awareness, we are awaiting the development of a vaccine for a virus. Generally this takes a minimum of 12-18 months before the vaccine can be legally be available to the general public. This virus can also be contracted more then once seeing as it can evolve meaning this vaccine is that much more important. As of February 17 2020 only approximately 1000 people contracted the virus in China, where it originated, now has become a global pandemic with 270 000 people being infected in as little as 30 days later. This seems to be a growth of 270% over 30 days, but that’s if it were increasing linearly, however numbers will rise substantially seeing as its growing exponentially. Now if this is statistical growth over 1 month and it takes 12-18 months for a vaccine to become widely available one would have to conclude that they must make plans for a long haul and not simply think that it will disappear in 1-2 months of hiding. Put simply the US could see a loss of at least 2000000 jobs a month starting in April according to Kevin Hassett (previously the president’s top economist from little over a year ago). So yes, expect Covid-19’s current domino affect on the economy that will reach far out even into the sale of real estate.

Pete Storseth · Answer

@Tom S.Thanks, I'll check my options. Good to know that it's not too late yet

Pete Storseth · Answer

@Fred ShatzoffYes, I'm sure there's some tire kickers out there right now with not enough conviction to follow through, but it's an uncertain time and smart they at least did the research

Pete Storseth · Answer

@Joseph CacciapagliaThx, yes I would definitely need to make sure the interest rates work for my deal also

Pete Storseth · Answer

@Timothy HeroThanks. I'm sure that will be a factor to consider

Tom S. · Answer

@Pete Storseth I applied with SoFi for an unsecured personal loan last week and was approved for $50k in about 20 min. Funds were in my bank account the next day! Very smooth process, all on-line, and they did a soft pull first to give you rough terms, so you could decide before the hard pull. Only downside was the longest repayment term was 4 years. Discover was also offering up to $35k unsecured personal loan thru a flier they sent me about a month ago.