My friends own a home worth about 80-85,000. It is fully paid for. They are wanting to move to another town but do not want to sell this home. They are going to rent it to their son. Can they borrow 55-60,000 against that home to buy their next home? Their credit is fairly good. And very good with the bank they want to borrow from. If it is possible, do they have to tell them that is for this other house? Because if they do then they have to pay for a home inspection on the new house and all of that right?
And an extra question - About what kind of payments would they be looking at with a 30 year loan on that kind of money?
If it makes a difference this is all happeing in MT.
Thank you in advance for your help.
2007-03-26 17:26:59 · 3 answers · asked by purple dove 5 in Business & Finance ➔ Renting & Real Estate
Yes, they can.
In most cases, they do not have to tell the bank what the loan is for.
But it will be a good idea to have a professional do an inspection on the new house.
Payment on a 30 year -$60,000.00 loan at 6% interest should be about $300.00 per month.
2007-03-26 17:42:04 · answer #1 · answered by bhupinder b 2 · 1⤊ 0⤋
Yes, you can borrow against one home to pay for another, many people do this when buying a summer/winter home. I would think since the first home is paid off they can borrow up to the present market value of the first home. You don't have to tell a bank why you want a loan. Many people take out home loans to pay off credit cards or to take a vacation.
The only thing the bank really cares about is how able you are to pay the loan back.
I am not sure about payments, It depends on the bank and the interest rate you would be charged. You can shop around, ask your banks what would be the average payment and interest rate on this type of loan. They are always trying to get your business, so don't take the first answer that sounds good. Shop around and do research, make sure you are getting the best rate and deal.
Good luck
2007-03-27 00:37:26 · answer #2 · answered by BlkRedRoses 2 · 1⤊ 0⤋
sure..but it is usually 25-35% of the appraisal that they will get..
so the mortgage company will do an appraisal (the owner pays for this and gets a copy).. and 25-35% will deducted and a new mortgage put on.....so eg. appraised 100k then 75-65k is what will be given..and a new mortgage put on.
as for rates..shop around..i thought I was doing good with 5.1% and then I got 4.85%..so keep looking .."City bank" is aggressively seeking new client...
good luck
2007-03-27 00:34:43 · answer #3 · answered by m2 5 · 1⤊ 0⤋