Can some one explain me in simple terms how this scenario would work.
- You bought your house for 300K about 5 years back.
- Currently appraised value is 500K.
- Mortgage balance is 150K.
- Roughly you would have about 300K as equity.
Now you want to buy another house for 650K, you don't have any money for down payment.
And you want to put a down payment of 250K. Without selling the first house, how could you buy the second house, say your intention is to put the first house on rental.
What are the options other than (i) Selling the house (ii) HELOC.
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The cowards never started,
The weak died on the way,
Only the strong arrived.
http://www.youtube.com/watch?v=_yK1i9cLAMM
Quote:
Originally posted by JRF
Can some one explain me in simple terms how this scenario would work.
- You bought your house for 300K about 5 years back.
- Currently appraised value is 500K.
- Mortgage balance is 150K.
- Roughly you would have about 300K as equity.
Now you want to buy another house for 650K, you don't have any money for down payment.
And you want to put a down payment of 250K. Without selling the first house, how could you buy the second house, say your intention is to put the first house on rental.
What are the options other than (i) Selling the house (ii) HELOC.
Hi JRF,
The maximum equity take out will be 200K. So you would refinance the first home for 350K. Put the 200K towards the new home. You will be under the 80% LTV in both cases so you don't have to worry about insurance premiums. So if income, credit score, and debt ratio are good you should not have a problem. Remember you will be carrying two mortgages. If you have a renter commitment you will be able to use the rent as income. Hope this helps.
Ayube
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Thanks for the information. Refinancing looks like a good option.
The housing market seem to be hot, I need to explore my options.
-----------------------------------------------------------------
The cowards never started,
The weak died on the way,
Only the strong arrived.
http://www.youtube.com/watch?v=_yK1i9cLAMM
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