Posted by gerald(tx) on July 06, 2003 at 22:32:34:
Since you own the property free and clear, any mortgage would be a first, not a second. A line of credit against the property would also constitute a first lien. Bear in mind that any mortgage is going to involve a ton of expenses in closing; appraisal, title policy, prepaids, fees, fees, fees.
Since you have a good asset and you don’t need that much money, you might want to consider a personal loan thru your bank, offering the property as general collateral. Assuming your credit is good, banks will generally lend around 50%, but you don’t have to pay all the fees associated with a mortgage. Since you probably don’t want a 15 or 30 yr loan anyway, this would probably be your best route. The rate will be a little higher, but wind up being a lot lower than paying mortgage fees.
Having a free and clear property also puts you in the driver’s seat for a lot of creative ways of financing thru your sellers. Put your creative thinking cap on and imagine how you could use your property as a pledge or trade in the transaction.
Hope this helps.