should I take a home equity loan from a rental to help pay for a new home purchase?
152441
NO......I WOULD STRONGLY SUGGEST THAT YOU SELL THE HOUSE..\nBECAUSE THEN YOU ARE GOING TO BE STUCK WITH 2 PAYMENTS... THE ONE FROM WHERE YOU BOUGHT THE HOUSE...AND THE 2ND LOAN YOU TAKE OUT...\n\nWHATS GOING TO HAPPENED WHEN YOUR MONEY RUNS OUT...FOR PAYING THE HOME YOU PURCHASED....??\n\nYOU WILL BE STUCK WITH 2 PAYMENTS.
458072
As I say very often, be careful with who you are getting your answers from on this site....some of the answers that you have received are not exactly true.\n\nFirst, the advantage of the interest only loan is the fact that you will be paying less.  That has been established on here already.  Although whether the property is a rental property or the one you are living in really has no bearing on whether the loan is good or bad.  The person paying the mortgage back is going to determine that.  It does not matter what type of property is.\n\nAs far as qualification, yes, they are easier to qualify for.  NOT because you are only paying the lender their interest; but because your debt ratio will be lower than a normal type mortgage payment requiring Principal and Interest (P&I).\n\nThese loans are great for people that have investment properties and they need some flexibility; for people with high yeilding investments that they are investing the difference of the mortgage payments into...etc.  These loans are NOT for those wanting to qualify for more house.  There is not a more stupid move to make and if a lender or a salesperson is telling you this, run as far as you can cause they are misguiding you.\n\nIf you would like more information on these types of loans or others, please feel free to contact me at timothy.kazee@americanhm .com and we can talk more.  \n\nTim Kazee
41577
As little as possible is often the most popular idea. However, it is wise to put down enough to make sure the property income will service the debt payments and taxes. You don't want to be paying out of pocket evey month unless you really need the loss for tax purposes. \n\nMost banks or savings and loans will require between 20 and 30 percent down payment in the US. The lenders are looking for the property to break-even or have some positive cash flow based on their projections income and expenses. The appraiser is often asked to make these estimates. However, I have purchased investment property with nothing but closing costs out of pocket using hard money lenders. I've even borrowed more than the purchase price when the appraised value was much higher than the purchase price. I have also run across some credit unions that loaned 100% for borrowers who had a good track record with the credit union. It's all in the deal.
549200
Equity in one property, can make it easier for you to buy your next property using a lease with option to buy.  The seller will see you have a track record and you may appear as a more substantial buyer.\n\nThe lease payments allow you to control or live in the property until you can save up a downpayment to use towards taking complete ownership.  You do not pay tax on rent.  Your equity on your first property stays intact. \n\nYou can also borrow against your equity, and not pay tax on borrowed money.  An equity line of credit is sometimes more convenient, less expensive to originate, and at a better interest rate than a 2nd mortgage. \n\nSome creditors will look at your equity and issue a line of unsecured credit. A line of credit like this leaves your equity intact, and gives you money to spend towards your new property.  You would not pay tax as you use your line of credit because you are again borrowing money. \n\nIt is correct that you can sell your first property and cash in your equity, but then you would not be purchasing additional property, you would be replacing one property with another.  It is possible you may be able to sell just your equity.  That would mean you now have a partner or co-owner on your first property, and money to spend towards towards additional property.
1016841
Almost simultaneously if you have equity and a good FICO.  On a new build in a hot real estate market you should have equity by the time the house is completed.\n\nYou maybe able to close the equity line when you close on the home.  \n\nSome buyers use an equity line for part of the downpayment and need it to close and that's doable.\n\nGood luck
571572
Buying real property is not like purchasing stock.  Purchase it with the intention it is your home for 4-5 years.  Your return will be on your taxes -  You will gain equity and you can right off  the interest on the loan, & the taxes on the property and get a refund from the Federal Government and possibly State taxes. Waiting has thus far proven that interest rates rise and houses may come down a little, not enough to cover the interest rate hikes.  Speak with a loan officer to find out how much you can actually afford.  Renting is just throwing your money out the door with no return. I am a homeowner and have now been rewarded with a return of equity of over 275% and I still won't sell.  My investment was overpriced in 1971 and I now have an unbelievable return on my investment.  Don't think short term, think long-term and when the price is right sell it and move on.
479143
Yes, it depends on how long ago, but if you have other good factors (good rental payment history never paid more than 30 days late) & good payment history on your credit you should be able to get a home loan. Depending on your job stability, income, etc. also will play a role.  Depending on how the whole credit history looks you may still be able to get a zero down mortgage, or worst case may need to put a down payment.  Also, if your credit is better try to do it in just your name, if you dont make enough income perhaps you can do a no-qualifing loan.
986772
if you own the house, a home equity loan would be in your favor.. i don't think you can use the house 4 collateral, if you don't own it.. but i could be wrong..
74115
Essentially you are borrowing money from the bank based on the value of your current home for the purchase of a new home.  The previous answer was correct but most banks aren't in the business of lending money for free, expect to pay some interest at least.  \n\nFor an example, I have a 3 bedroom home I want to sell and buy a 5 bedroom home.  I have a buyer for the 3 room and the owner of the 5 has accepted my offer.  If I sell my 3 first then I'm homeless or need to live in a hotel and put my things in storage.  If I buy the 5 first I'm paying 2 mortgages.  So what I do is borrow money to buy the 5 so I can move my stuff in and not be homeless, then when I get the money from the sale of my 3 I pay back the loan.\n\nThings to remember:\nYou'll most likely have to be in the process of closing both homes, in contract or whatever you want to call it.  \nIf you need to take longer there may be some kind of penalty.\n\nLook into a regular Home Equity product with no pre-payment penalties and no/low closing costs as a possible alternative.
999150
It's a good idea, simply because homes appreciate over time (maybe a lot of time, but they generally do).  \n\nYou have to take into consideration what the mortgage and taxes and insurance will cost you on a per month basis.  Then you have to figure out if you can rent it for that figure.  If you can, or can get more, is it worth the extra tax for the income?  If it's not, do you need the loss for your taxes?  \n\nRemember, when it's time to sell income property, you have to pay taxes on it unless you do a 1031 exchange, but that just means you're buying into another income property.  \n\nFinding good renters can be hard.  Can you pay for the house if it sits for a couple of months unrented?  Do you hav e the time to really check out a potential renter?  To be a landlord?\n\nThere are a lot of pros and cons.  If you have the time and the resources, by all means, hold on to it because real estate is a great thing to have.  But it's a lot of work too!\n\nGood luck  :)
839409
Dazed and Con has some very valid points. I would like to elaborate on them. Personally, I don't believe in the "rent to own" - it is a load of crap that doesn't give you any tax benefits. If you are able, take out a 5-year interest-only fixed loan. By that time, you will be out of school and can refinance the property. You should have built up enough equity by that time to not have to worry about a negative amortization. You can pay down the principal during this 5 year time if you wish. When you re-fi after you are out of school and working, you can roll some of the student loans intot he re-fi if you fix the house up enough to get a good high appraisal. This way, all of the interest including your student loan money would be tax deductible. This brings me to the last issue. Are you prepared to pay back student loans plus Uncle Sam after you graduate? If not, then having a house that is yours, not some "rent-to-own" nonsense, will give you the type of write-offs you will need to cut down or eliminate those tax checks. If the landlord is not willing to sell the house to you under a true normal sale scenario, then he/she is not serious. You never said whether or not you have a down payment. If not, then the rent-to-own may possibly work if you have an iron-clad conract with regard to your down payment coming from your rental payments of 4 years, an end date to the time when the property will be put into your name, etc. Take any rent&#92;-to-own contract you end up with to the local court house and record it against the property to stop anyone from selling it out from underneath you. Sorry to be so cynical, but I have seen many a rotten landlord on these. Buy it outright if you can.
662291
Depending on your needs (and credit rating!), you may find that a home equity loan is more appropriate than a total refinance.  You would save on closing costs and be able to choose how much to take out and when.  These loans are typically higher interest rates, but the savings may work out for you.\n\nAt 8%+ that loan sounds very high.  I would shop it at several lenders until you get the best rate for you.  If you can find a reputable mortgage broker/lender you may be able to submit to several companies at once. (Yes I know "Lend Tree" has the same service, but I've found their lenders are all very similar). \n\nDon't give up! With prime rates still in the 5% range, you can probably save 2-3% by being thorough.\n\nMy company does NOT make or sell loans, but I will be glad to help you find a lender if you run out of resources. If you're looking to resolve a load of debts I can help you with that decision as well.  Call 888-221-2711 and ask for the Director.
490334
how come you have no equity?\nyou bought it for 0% down? then get the new house with 0 down.\nyou refinanced and lost all the money gambling? you should still have some equity, no?\nif you don't have savings and don't qualify for the right loan, then stay at your current home, budget yourself so you can save and get a new home at a later point in your life.\ndon't live beyond your means, don't be 'house poor' (people who buy expensive house and  burn 90% of their income on the mortgage).
333126
I am not sure whether you are asking which is the better purchase option for you, or if you are asking whether you should purchase a home at all. If your question is the second one, yes, you should purchase one or the other, as you will be building equity of your own, rather than paying rent, which is building equity for someone else.  If you are asking which to purchase, there are a number of things you should consider.  While a house may appreciate faster, thus allowing equity to build faster, it requires a lot more maintenance, repairs, and yard work.  Are you equipped to do these yourself, or have the resources to pay someone else to do them?  Talk over everything with a real estate professional you can trust.  Look at every consideration you can think of, and decide which would be best for you.  Only then should you start to look at potential properties.  Good Luck!
940371
You should be able to technically do this as long as the new home equity loan + the 1st mortgage are not more than 85% of the home's total value.  This is generally the cap.\n\nSo if you have a home that's worth $200,000: 85% of that is 170,000.  As long as the new home equity loan and the mortgage balance added together are less than that amount, you should be OK.
891816
Hello, in the past two years you don't think the value of your current property has risen $15K?  If not then you should certainly wait.  Purchasing a new home right now also has its downside as their value may still be increasing but not as it was a few years back.  So I would sit tight for a bit and build more equity before you make any rash decisions.  You should never owe money out of pocket on your home when you sell it!!!
626211
no.  the government is in the business of encouraging home ownership, not funding it.  the whole point of home ownership is to put some equity into something so you have a sense of connection to this massive pile of debt you've just bought.  if the government gave you the downpayment, what sense of connection is that?  you bought a house with the government's money and there's nothing keeping you from walking away.