I own a paid off 120-140k house. My credit score is 640 and quickly improving. I rent my house out and have an apartment but my lease expires in a month. My apartment costs 600 a month for a studio. Ive never been late ect. I found a condo with low fees monthly and its only 55k for a 2br 1 1/2 bath. What is the chances I can get a home equity loan for this condo with a 6-7% intrest rate? Should I go with a home equity loan or a totally new mortgage on the condo itself? The home equity loan has no closing cost while a mortgage will be around 3k in closing. I just dont want a home equity loan with more than 7% intrest. Anything more than that is ridiculous! Can I get it?
2007-02-21 16:43:53 · 4 answers · asked by hopes2graduate 1 in Business & Finance ➔ Renting & Real Estate
I don't think that you can get a home equity loan on either property.
1; You have to live in the house to get an equity loan &
2: You don't have any equity in the condo.
A conventional loan yes.
I would say that you have a good chance of getting a $55,000 dollar loan on the paid off house & then use the money to pay cash for the condo.
When the condo deal closes you would be able to take out a home equity loan on it.
2007-02-21 16:53:40 · answer #1 · answered by Floyd B 5 · 0⤊ 0⤋
Equity loans or any other loan that would take the second lien position of your home is always going to have a higher rate. The only way to get it that low is to get it adjustable but that's opening up a whole new can of worms.
Learn all you can first at my mortgage blog: http://explaintome.blogspot.com...
Based on your situation, it doesn't look like you would be taking an equity loan at all. You have no mortgage on the property so it would be considered a regular mortgage in the first lien position.
An "equity" loan is just a snazzy term for a loan in second position. That's all.
I would take a loan on your paid off home since the rate would be best because you're only borrowing 50% of your equity at most. Even though it's investment property, you'll probably get a rate in the low 6's because of the equity position. There will be fees but I'd rather have fees than have to take a higher rate. Especially since you have the option of financing the fees into the mortgage.
Best of luck!
2007-02-22 09:43:29 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Go for a refinance. Its safer and you can usually get a lower interest rate especially if you get a balloon payment. A balloon is when you refinance within a certain amount of time or you go into a variable interest rates. Some balloon payments affer half a point below prime and your payments could go down. Plus if you refinance a home you already own, a mortgage company will send the best appraiser guy there and get you more than your house is worth to give you cash in hand. We bought our house in 2005 and refinaced in December. within 3 weeks we had our house payment reduced all of our bills paid off and a check for 14,000 for christmas. When we bought our house it appraised at 89,000, a year later it appraised at 108,000 thats how we were able to do it all. there is all kinds of programs out there. Investigate them and good luck
2007-02-21 16:58:18 · answer #3 · answered by Anonymous · 0⤊ 0⤋
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2016-10-16 05:34:28 · answer #4 · answered by ? 4 · 0⤊ 0⤋