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Hi, We went to our current bank and due to only being in our home for 9 months they will only loan us up to the value of our purchase price of the home. We went to another bank and they said our house is worth 2k less then we bought for by doing a computerized search of the average house prices. We know this is not accurate because our realtor pulled comps and they are a lot higher. We are waiting for a phone call to set up a walk through appraisal on Monday. If you got a home equity line of credit did you get an appraisal done on your home did it come out to the number that you needed? This whole thing is really stressing us out. We didn't think this would be so complicated. We were planning to start earlier instead of the summer but now we don't know if we can if we don't get the amount that we need. The house only needs to appraise for 10k more than we bought it for. That can't be too hard in this market. Our bank is willing to give us 20k but we need 30k. Please keep us in your thoughts and prayers. Thanks,
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We used a home equity line of credit, But we only owed about a fourth of the value of our home. They did not do an appraisal because they have the original mortgage, so they called the tax office and got a value from them. YOu might want to inform about the refund you will get on your taxes after the child is home. The $10K tax credit is allot to put toward the balance within a year, probably Good Luck, everything will work out.
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Yes, the $$$ part if very very stressful! We only lived in our house for about 7 months and got a good home equity loan. they just did it by the books, not an appraisal. Also, though, I went through many many banks looking for someone to give us an adoption loan. Even my bank that I had banked at for over 5 years wasn't being very helpful. I finally went to my husbands credit union, and they were more than eager to do whatever they could to help us get a loan for the adoption. They did what they could in home equity, plus they took the title to our cars and gave us how ever much the value of the cars were, plus a personal loan. At first it looked like we were never going to get a loan, and then it just fell into place, even when we switched countries and needed double the amount. Don't worry, it will work out. Good luck to you!!!!!!!!!!
I agree with Erin... The money thing really stressed me out in the beginning. It sounds silly when someone says "it will work itself out" when dealing with such a large amount of money but it truly does. You find yourself covering the expense in the beginning- agency fees, state certification, passports, authentication, etc...before you know it you have paid for alot of the adoption w/o taking out a loan...you put yourself on a tight budget (I paid minimums on all bills) and begin to save. The load will come later when you have to be faced with the country fee. Take a look at your 401K accounts, great source for money and you pay yourself back the interest. Regards, Brandy
Isn't there a huge risk with taking money out of your 401k? Ok there is a risk to any loan but I heard you can get a huge penalty for it. Unfortunately we are not in the position to cover the expenses. I am unemployed currently in school. We have a huge mortgage payment first mistake but we didn't know that five months after we moved here I would be laid off from my job. :(
brandydawn
I agree with Erin... The money thing really stressed me out in the beginning. It sounds silly when someone says "it will work itself out" when dealing with such a large amount of money but it truly does. You find yourself covering the expense in the beginning- agency fees, state certification, passports, authentication, etc...before you know it you have paid for alot of the adoption w/o taking out a loan...you put yourself on a tight budget (I paid minimums on all bills) and begin to save. The load will come later when you have to be faced with the country fee. Take a look at your 401K accounts, great source for money and you pay yourself back the interest. Regards, Brandy
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My dh just told me that there is a tax and a penalty on taking money out from your 401k before you retire. I think when you say that payments are taken out of your paycheck before taxes you mean the payments you are contributing to the retirement fund not what you take out. Any accountants out there that can clairfy 401k's? We are really counting on getting this home equity line of credit.
brandydawn
No, you don't get penalized for a loan. It actually works well because they take the payments out of your paycheck before taxes. I think you only get penalized when you take all of your money out before retirement. Regards, Brandy
You can take out a loan on your 401(k). There are several disadvantages to doing so: you lose out on any gains the money would have made in your account. You wind up paying taxes twice because the loan is repaid with already taxed income (this comes out of your paycheck separate from any new contributions), and you will be taxed again when you eventually retire and withdraw these funds. And, if you leave your job the entire amount must be repaid or you will then have to pay the 10% penalty plus income tax. As they say, though, you have to cut your coat to fit the cloth, so you'll figure out what you have to do....
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We did an equity line of credit to cover both of our adoptions about 2 years ago. They did a computerized appraisal and it was plenty for the adoptions but was about $50K less than what the house would sell for at the time. I would think your regular appraisal would do the trick! We paid everything we could without touching the equity line until the big chunk was needed. Hope that helps!
Unfortunately I don't have any suggestions. My daughter is my "home equity" child. I was in my house 4 years before I took a loan to have a pool build and ended up adopting a baby instead. Her adoption fees will be paid off about the time I'll probably have to take another loan to get her through college. But please be careful with taking a loan from your 401K. I did this to purchase my home a few years ago. I've since left that job and was required to pay the loan off within 30 days or face paying the early withdrawl penalty. Mindy
We looked into doing a home equity loan but with a line of credit your monthly payment is based upon your current balance. When we get the 10k tax credit this is going to go towards which will make our payment lower. With a loan your payment is set every month no matter how much extra principle that you pay. Your also getting 30k up front and paying on it from month 1 as oppose to writing a check from your line of credit as needed. Good luck!
Lilac girl
This is a very timely thread b/c we're going through the same questions and process. Do a search on this forum for other financial issues b/c I've received a lot of good pointers from people. My best friend is in banking and I asked her about the equity loan vs. line of credit and she said if I were her client she would advise me to do a loan b/c the line of credit is adjustable interest rates and the fed keeps increasing them and she doesn't see an end to that. Also, do a search on the internet and you'll find easy to understand info re: loan vs. line of credit pros and cons. Good luck to you. My husband and I are right there w/ you!!
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