Posted by Wayne-NC on January 11, 2004 at 17:52:59:
Your numbers are good. Banks can do this transaction all day long providing your credit, income, and equity are within guidlines. There is also another stat that banks follow closely and it is the debt to income ratio. When buying another property the banks will look at the new, increased payment along with the new purchase money mortgage and factor it in accordingly. This is the way I started and it is a technique called equity transfer. Now, that means money is not really spent. Just be sure that the equity loc payment is factored into the cash flow projections of the new purchase. Finally as you said, “many banks won’t allow”. Some do, wait, many do, so you just have to shop around. If you have a good credit score the world is your oyster for REI.