Posted by Stan on July 12, 2005 at 10:14:09:
As my good friend, Bill Engvall, once said…“Here’s your sign!”
Existing 80/20 and getting another loan? - Posted by Wade-(Seattle, WA)
Posted by Wade-(Seattle, WA) on July 12, 2005 at 24:43:36:
I was told by a mortgage lender today that I could not obtain another HELOC for purchasing Real rental Investments with the current 80/20 HELOC I have on my primary residence? Is this tru?
FACTS:
-Credit score is 714, wifes is 740
-we both make good income together100k plus a year on our day jobs
-Have an existing80/20Loan/HELOC on our first and primary residence.
House is worth 245k we owe 200k
Re: Existing 80/20 and getting another loan? - Posted by loans
Posted by loans on July 12, 2005 at 14:19:15:
Third place loans are not what you want to do even if you could. You don’t say what rates, etc. your original loans are but if both your old loans add up to about 200k, what you could do is refi both old loans into a new fixed rate loan which stayed under 80%ltv to avoid any PMI costs and to also lock in the low fixed rates of today for your entire balance owed. Then you could create a new second place HELOC for the remaining 20% which you should treat basically like a credit card or temporary bank loan, taking out cash only when you need it to do a deal, but paying it back immediately when the deal is done. Keeping a zero balance on the HELOC (between deals) will maintain a 20% safety margin on your home plus you will avoid paying continuous high interest payments. If the appraisal comes in real tight, you might have to put some of the original 20% loan into the new HELOC but hopefully you can pay that down quickly with profits you make. The downside of this scenario is that you will have to pay refi costs for two new loans. However you can minimize this by shopping around for the very best deals since you both have excellent credit. (although it might help a little bit if you could get it above 720)
Re: Existing 80/20 and getting another loan? - Posted by Mike (Seattle WA)
Posted by Mike (Seattle WA) on July 12, 2005 at 11:08:13:
If you have an 80/20 - the 2nd loan is usually the HELOC and you should be able to draw money out via this loan - of course it will be at a higher rate than if you re-fied (refried?) into a single loan.
Re: Existing 80/20 and getting another loan? - Posted by Devon Daughety
Posted by Devon Daughety on July 12, 2005 at 24:47:49:
YES this is true. The reason being this would be a 3rd lien on the house and very few lenders do this. If you can find a lender that will do this, your rate would probably be 15%+. The reason lenders don’t like doing this is because that would mean the loan would be in 3rd place, subordinate to the 1st 2 liens. Why don’t you combine the 2 trusts and take the cash out and make it 1 loan instead of trying to tack on a 3rd?? What state are you in??
Re: Existing 80/20 and getting another loan? - Posted by Cletus
Posted by Cletus on July 12, 2005 at 01:49:54:
DD,
Here’s a clue…Wade-(Seattle, WA), my guess is Waoming.
