I posted 06/12/08 on this forum titled “Moving Mortgage - Freeing Equity”. Sorry that I didn’t mention that.
Will also post to the Cash-Flow Forum
Long story … Short. I previously had both properties mortgaged with the same bank. Combined the two and put the existing mortgage on my residence with the HELOC.
The second property more than exceeds the “walked loan”. (Unless, of course, the LTV is greater than 50% or so on the 2nd property.)
The first step, as I indicated, would be the transfer of the loan to the second property. After having done this, there should be no reason for an objection by FHA to a Reverse Mortgage on my primary residence since there would be no existing mortgage to pay off and then the total creditline could be obtained resulting in obtaining a $163,00 creditline instead of $63,000. PLUS no monthly payments on my home and the extra $600 that went to the HELOC on my residence would still be made, only on the second property as the collateral.
I posted the MOVING MORTGAGE - FREEING EQUITY message several days ago and have had no responses. Should I have posted to different forum?
Since this was a course of action that would solve a couple of issues for me, I wanted to know if it has ever been done as pertains to Reverse Mortgages or not. I know that moving of the mortgage and substitution of collateral to move debt from one property to another can be done, however, since I have never done this before, I was looking for advice from someone who knows if this was possible in a Reverse Mortgage situation.
As I see it, the first hurdle would be for the bank to agree to the substitution of the 2nd property. Then proceed (or start now) the Reverse Mortgage, which would take 30 - 45 days to close.
Using the numbers I gave, by doing this it would free up $163K in usable equity as opposed to $63K. Hmmmm… Wonder what I could do with an extra $100K as investment capital???
As stated before, any and all help and input would be appreciated.
I donâ??t know if you posted in the wrong place before because I donâ??t know where you posted before.
Your particular question could be answered by me or the guys on the Cash-Flow forum.
What youâ??re talking about is what we call â??walking your loanâ??.
It is not a common practice due to you have to do exactly what youâ??ve said and that is the first hurdle would be for the bank to agree to the substitution of the 2nd property.
It has to be done with a bank that is a portfolio lender and the property value would have to be equal or of more value then the property securing the loan.
DonDe, Iâ??ve never done one with a Reverse Mortgage, and the only reason I would think youâ??d have a problem is that most Reverse Mortgages are FHA insured and you would have to have FHA approve it as well as the lender.
I suggest you go to the Cash Flow forum and run your question by them,