If you own a house outright, but want to buy another house and let the existing one, how can you release the cash in the first house to buy the second?
A mortgage of some kind must exist, no?
Thanks
2007-03-22 07:12:47 · 7 answers · asked by Matty 2 in Business & Finance ➔ Renting & Real Estate
open the door
2007-03-22 07:16:15 · answer #1 · answered by lion of judah 5 · 0⤊ 1⤋
You're probably talking about a cash out refinance. You might want to go to a bank or speak with a real estate agent for the option that will suit you better.
If you own the 1st house, free and clear and the second house is not mortgagable, then you may need cash.
Sometimes, if both homes are within a certain distance of each other and you have a mortgage on the first house, you can't easily get a mortgage on the second (depending on location)
Also, what type of financing does the second house allow? FHA, Convention or Cash Only.
A bank will want to know where most of the cash out money is going and some loans will actually write the checks for you.
2007-03-22 07:27:21 · answer #2 · answered by scorpio10monkey 2 · 0⤊ 0⤋
Typically the bank will lend you 75% of the present value of your home. You can take it in almost any capacity (line of credit, loan, mortgage and some will even give you a visa card with that limit).
I would suggest a line of credit on your existing home (assuming it covers the purchase price) as you can get prime if your credit is good. A line of credit is also far more flexible than a mortgage. You pay what you wish - as little as interest only up to the whole balance. Mortgages (closed) have penalties for early repayment. Also, the bank pays the costs.
Be careful when you speak to bankers. A lot of them are not qualified to give financial advice. Look for someone with qualifications and explain your situation.
2007-03-22 07:56:14 · answer #3 · answered by Anonymous · 0⤊ 0⤋
First, It's always bugged me that people think there is "cash" in their house becuase they aren't in debt. It's like debt = normal, owning it outright = a waste.
You can refinance the paid off home to get the cash out and buy the second home in cash, or you can obtain a mortgage for the new house.
2007-03-22 07:19:13 · answer #4 · answered by Anonymous · 0⤊ 1⤋
Why not just get a normal mortgage for the second house?
Seems easier than realsing your equity to buy the other house.
2007-03-22 07:17:13 · answer #5 · answered by jeanimus 7 · 1⤊ 0⤋
Look into what's available in the "Buy to Let" Mortgage deals.
2007-03-23 00:18:52 · answer #6 · answered by Anonymous · 0⤊ 0⤋
re-mortgage your first house and use that money to buy your new house
2007-03-22 07:26:02 · answer #7 · answered by audi 1 1 · 0⤊ 0⤋