Posted by Stew (NE) on January 16, 2001 at 13:12:01:
but I was a very good customer of the bank and I told them that stipulation would only be good for 6 months.(The time I needed to fix up the house to rent). They said OK. As long as we get paid we don’t care. My second was for 10K and for 5 years (which I paid off 2 years early because of the money from my tax break and rental income money). Don’t let the bank intimidate you in to making a knee-jerk response. Think outside of the box. Don’t lie. THINK. As RDPD talks about the banks makes their money by making good loans. They need you. Good luck
I have $40K in equity in my townhome which is also my personal residence. My wife and I would like to use this equity as a down payment on a single family home and also rent out the townhome, however three banks today told me no. They said they don’t make home equity loans on rental property. Is there any other way I take this equity out and use it for our new home?
Don’t tell them you want to move out and make it a rental. Tell them you want the money for fix up and investment, then after you get the loan you can “change your plans”.
Why not just refinance the first mortgage on your townhouse, take out cash, and then once you have closed on the new loan, rent the place out? You should have no problem getting an 80% LTV cash-out refinance from most banks, and Stacy indicates in another message that Bank One even goes up to 85%. And you don’t even have to claim you’ll be living in the house.
Re: Bank Won’t Give My Home Equity Loan - Posted by Frank Chin
Posted by Frank Chin on January 16, 2001 at 08:36:39:
If you’re living in the home right now, then you can get a home equity loan. I don’t know in your case if you have to tell the bank what the purpose is for. You don’t have to tell them you’re buying another home. Tell them another story.
I got a home equity loan back in 1988. Used part of the line to put a down payment for a home that finally I moved to in 1993. Banks asks for source of funds for the new home, usually a savings account which’s been around for at least 6 months. So, take a few dollars from the line and place in in a money market fund for the required time frame. I’m told that if they see a sudden big deposit say 15K - they may ask where that came from. So open a money market fund - then move it elsewhere. This way you can say you transfer some funds to get a better rate. I doubt they’ll trace funds further back than that.
In fact - open several money market funds and move it to just as many more. Use your imagination. This way the bank can really have some fun tracing it, that is, if they’re really that studious.
I know you’re in a tighter time frame than we were. What I’m saying is to find out the banks rules and play their game.
after the first bank told you that they would not make home equity loans on rental properties. Would not a prudent person omit to mention that they are planning to move out of the property (and turn it into a rental) when applying for a home equity loan with the second bank?
Posted by Stacy (AZ) on January 15, 2001 at 21:43:51:
I’ve taken out second mortgages on investment homes through my bank (Bank One). They went up to 85%. Would this get you anything, or is this $40K equity on a $500,000 property?
Re: Bank Won’t Give My Home Equity Loan - Posted by IB (NJ)
Posted by IB (NJ) on January 15, 2001 at 21:43:27:
We’re closing on a home equity loan tomorrow against our vacant rehab (which has got to be worst than a rental). Going through First Union National Bank. Give them a try.
They mentioned to me before I told them it would be a rental that the home equity loan would be under the assumption that the home NOT be used as a rental. If I lie and am caught - I’m in trouble.