Home Equity Lines - Posted by Matt

Posted by Matt on February 22, 2002 at 23:29:21:

I don’t live in the home, no. It was purchased to be a rehab/resell but the current market conditions fall a little short of our original comps and make the margin a lot lower than we anticipated. Rather than lose the difference, we’re now thinking of holding the property as a rental producing around 200/mo positive cash flow and leveraging the remaining equity and cash in hand to purchase a 4 flat.
As far as working with a lender to do a second on the property… well I work with a portfolio lender now that I have a few lines of credit through and while I would normally just ask his opinion on the concept as stated I would rather not scare him into thinking I’m leveraging his collateral to 95% or above. I wouldn’t blame him for being nervous but I’d rather not jeopardize our current lines for the sake of this new one.
It is a single fam residence and as I said before it is currently free and clear (save a current 24k line we have on it that will be paid off when we secure long term financing for it.)

I suppose if I could get a different lender to float a 90% to total value mortgage on the property I could always pull the remaining $ I was looking for from another property. Was hoping to use this one for the whole deal on another purchase…

thanks for the info tho.


Home Equity Lines - Posted by Matt

Posted by Matt on February 22, 2002 at 20:29:25:

Hello all!

Just a quick question for any lenders out there…

I purchased “Property A” for all cash (real cash not loans) and have used cash to fix up the property and in our current market would rather hold on and rent the property rather than sell. It’s current FMV is around $160,000. I’d like to mortgage the property for at least 75-80% of FMV. While I know that shouldn’t be very hard to do what I’m wondering about is the equity left in the property after the 1st mortgage.
160,000 x 75% = 120,000 1st mortgage.
160,000 - 120,000 = 40,000 equity.
Can I then get a home equity loan against the remaining 40k on the property even though I have just mortgaged it? I’m concerned about the timing of the whole thing because I’d like to use not only the cash in hand from the 1st but at least some of the equity to invest in other properties. I hope this makes sense.

Any help would be greatly appreciated!!


Re: Home Equity Lines - Posted by youngsterz (UT)

Posted by youngsterz (UT) on February 22, 2002 at 22:54:02:

Do you live in the home? If so, you can do an 80% first, and a line of credit for the balance of at least 95% of the total value. Those can be done concurrently. Assuming good credit and income.

If it is an investment property, you can get 90% LTV loans on 1 to 2 family properties with relative ease. You’ll probably have to pay some minor fees for the cash-out.

Banks don’t like to do 2nds or lines of credit on things that aren’t your primary residence, but hard-money lenders will look it over.