Posted by Charlie on December 04, 2004 at 12:32:07:
You can do either. You can get an equity line of credit up to 100% depending on the bank in you area. The only problem with the title is the seasoning which is owned for less than 12 months. Try various local banks and talk with them about what you are trying to do. I have a couple of people that will do unseasoned refi’s on property but equity line of credit would be cheaper expect to pay closing costs since NOO.
Thanks,
Charlie
What are my financing options? - Posted by Katharine (OR)
Posted by Katharine (OR) on December 03, 2004 at 02:38:15:
Hi everyone. This last week I got in contact with a local hard money lender in my area. He charges 6-8% loan fee and 8.9%-9.9% interest (seems about right…) and wants the loan guaranteed by a piece of real estate. I bought my first foreclosure house using a home equity off a duplex I own free and clear (appraised at 185K 4 months ago). Originally I thought that this was good because I could use the home equity loan as a tax write off on the duplex but now I am not sure. I would like to by another foreclosure house but am kind of stuck on the financing. What I am wondering is it possible to refinance the first foreclosure house I bought(that’s now fixed and is a rental) and get a line of credit on my paid off duplex (non-owner occupied)? I am justing thinking that I can some way get a better deal on borrowing money if I use my equity vs. a hard money lender. Any suggestions what you would do in my situation? Who usually does lines of credit…banks or mortgage brokers, or? Are there any closing costs associated with lines of credit? My goal now is to buy another foreclosure house (that I can’t get a conventional loan on and only need something short term) to rehab and sell. Anyones ideas or thoughts about this is very much appreciated! Thanks again everyone for the insightful information you share on this website! -Katharine (Oregon)
Re: What are my financing options? - Posted by Natalie Smith
Posted by Natalie Smith on December 08, 2004 at 10:15:10:
My CPA always says, “Do what makes economic sense”. Your costs should be much less by using your equity instead of a hard money lender.
You should be able to set up a line of credit secured by your duplex. They might charge a fee and some closing costs to set this up, but it wouldn’t cost you any more than getting a loan. Also, if you go to a local bank (try their commercial department also), you should be able to set up one line of credit using the equity from multiple properties. Local banks are more flexible regarding title seasoning.
Definitely check with your CPA on where to write off the interest expense. You may not be able to write it off against your duplex, but you should be able to write it off against the property you use the money for.