A homeowner wants to refinance, but is having trouble finding a lender to approve substantial medical bills. Ilyce suggests that the reader might seek a loan of equity housing a local bank to repay the original loan instead of refinancing the mortgage.

Q: I have a mortgage of $ 11,000. I’m trying to refinance my loan and get another $ 20000 in cash to repair some things at home and also to pay some of my medical bills.

I have a lot of medical bills on my credit report because I had a job without health insurance and then I lost my job because I became disabled.

My loan has an 8 percent interest rate and the bank is offering me 7.4 per cent if I refinance.

I thought lenders do not have medical bills into account when deciding whether to approve or not a particular loan. I suppose I was wrong. What can I do?

A: Lenders do see all the bills you owe and how long it takes each month to service that debt. As you have so many medical bills, its debt-to-income could be out of whack.

Another problem is that you can have is trying to refinance a loan that below $ 50000 - which is the threshold amount of benefit to many lenders.

What about taking a different path? Instead of refinancing your mortgage, you could seek a loan of equity housing your local bank and pay your original loan. Not only is much less expensive than refinancing a mortgage, is faster and easier. You will also have a competitive interest rate may be lower than what has been offered or are paying now. If you decide to pay your loan age with a home loan, you’ll have plenty of options: some loans will have floating rates, others can be fixed and others may be for a shorter period of time. You will have to determine which of the many alternatives available in the market for equity housing will be better for you.

Start your search for a home equity lender of visiting BankRate.com. You can also go in person to your local bank to inquire about the fees associated with a home loan. You can also visit myFICO.com to obtain a copy of your credit history and credit score. This way you will know exactly what is reported and what we can do to increase your score at the highest possible level.

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