I currently own a house that I purchased in sep 06 for 1.485 mil in a nice area in mountainside, nj. Even so, given the current environment, the house today would prob be appraised for less, maybe 1.35-1.4 mil...if I had to guess. I put down apporx 885k and have a 600k (now 582k) 30 year fixed mortgage at 6.5%. I have a net worth of approx 1.35 mil - 885k down on my house, and about 465k in stocks and savings. My problem is I need more liquidity to pay for my living then I currently am earning and don't want to take more money out of my investments. I also just changed jobs and currently earn $75k/year base salary. There will be significant commissions, but not that I can show as of now. The bottom line is despite good credit (approx 720-750 credit score) and plenty of assets, I can't get a home equity loan or line of credit b/c I my debt to income ratio is too high considering my relatively low salary and higher mortgage. what options do I have aside from refinancing which can be costly and doesn't really make sense just yet.
If your living expenses are exceeding your pay, I don't think applying for a HELOC or line of credit is the best answer. Logically, this will not improve your financial situation as you are only increasing your total liabilities and monthly bill payments. The unknown variable here is the amount of commissions you will receive. You said it will be "significant", but this does not quantify it. If it is truly a great amount, you may need to just hold on tight by spending some of your savings, as that is what it is for, until your paychecks come around.
You may also want to look into refinancing the house. If you can find a lower interest rate, your payments would drop if you did a rate and term refinance with no cash out. You stated it would be costly, but you may be mistaken. If you have great credit you should ask for a no points, no fees loan or something close to that. If you would like to shop around, Bills.com can help you get matched with a lender within minutes, just fill in your information at: Mortgage Refinance Quote.
As you earn commissions, you will also be able use this extra income to improve your debt-to-income ratio when qualifying for the refinance. Biggest takeaway- you have clearly saved well for retirement or in case of a rainy day. Well, it is raining and you are fortunate to have these resources available. Weather the storm until your commission checks start to roll in and you can use this money to help steady your finances.
I hope the information provided helps you Find. Learn. Save.