2007-03-19 05:34:38 · 7 answers · asked by uttamkumar b 1 in Business & Finance ➔ Renting & Real Estate
Mortgage. Most lenders won't offer a line of credit large enough for a house without it being called a mortgage loan, and again that does also give you the best interest rate. If you are a teacher, in law enforcement, or have served in the armed forces, you may be able to get an even better rate, but that will also depend on where you live.
2007-03-19 05:43:57 · answer #1 · answered by katrose 3 · 0⤊ 0⤋
A great deal depends on just how long you plan to keep the house or retain the mortgage.
30 year fixed rate loans are at a rate of around 6% today for a 30 day lock at a par (no points paid to lower the rate). If you are planning on being in the home for a 3-7 year period you can get an even lower fixed rate. The payments are amortized over 30 years in each of these scenarios, principal, interest and taxes and insurance (if required by the investor or requested by the borrower).
Lines of credit are usually, at least initially, adjustable rate loans based on the prime interest rate with add ons to the margin for lower credit scores or higher loan to value. Prime is at 8.25% right now, so a fixed looks pretty good unless you are planning on keeping the property for a very short time and want the interest only payments offered by a line of credit.
2007-03-19 12:43:53 · answer #2 · answered by mazziatplay 5 · 0⤊ 0⤋
First of, you can only use a LnCr to buy SFR if the property is to be investment property and NOT owner occupied. Typically, these lines are given for no more than 36 months (and that's an optimistic maturity) at interest only for the term of the line ballooning at end of maturity. Which means that you would have to pay off the balance in full in 3-years or term out the loan. To term it out, you would have to become conforming, which means that you might need to bring 20% of the appraised value to the table as down payment.....
A conventional mortgage is always a better choice since you can get a break on the rate and repay in whenever, so long as there is no prepay....
2007-03-19 13:13:56 · answer #3 · answered by boston857 5 · 0⤊ 0⤋
If you mean getting a LOC on a new property that you do not own then you will find many landers will not make such a loan.
If you are talking about using your LOC that is in place on a different property you can do that. Better when you expect the hold period for the new property to be short as there are few to no fees associated with using an existing LOC.
If you expect to buy the property and hold for a while then a more traditional mortgage will work best in many (not all) cases.
I would need more info before I could answer in a more precise fashion.
2007-03-19 12:54:42 · answer #4 · answered by Anonymous · 0⤊ 0⤋
A mortgage is going to get you a longer term, lower interest rates and more principal than a LOC.
If you are in the market for a mortgage, home equity loan, or refinance get up to 4 FREE No Obligation Mortgage Rate Quotes at http://www.m-o-r-t-g-a-g-e-r-a-t-e.com
LEARN HOW you can save some serious money with
http://www.h-o-m-e-e-q-u-i-t-y-l-o-a-n.com and FREE Home Equity Loan Information
Get details on a FREE HOME SECURITY SYSTEM http://www.h-o-m-e-s-e-c-u-r-i-t-y.com
2007-03-19 17:11:19 · answer #5 · answered by annalisa.fontana 2 · 0⤊ 0⤋
What kind of line of credit are you referring to? I would 100% say through a Mortgage.
A) it looks better on your credit report
and
B) you'll get a lower interest rate than on a line of credit
2007-03-19 12:38:57 · answer #6 · answered by AriesJWR 4 · 0⤊ 0⤋
normal mortgage's are better, lines of credits typically have higher interet rates then a 30 year fixed mortgage
2007-03-19 12:39:36 · answer #7 · answered by daniel_97202 5 · 0⤊ 0⤋