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Old 01-10-2019, 12:40 PM
 
1,187 posts, read 1,487,623 times
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Looking to purchase a home in Colorado, now living in a paid-off home in Texas. Would like to buy in Colorado first. Have resources for 20%+ down payment, but not enough to buy the new home outright without selling old first. Once old home is sold, I would likely pay-off any loans related to the new purchase. In order to minimize fees, does it make more sense to get a home equity loan on old or to get a new mortgage on the purchase (given the expected short turnaround)? No credit issues, employed, no debt. The loan would be approx 30-35% of new purchase.
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Old 01-10-2019, 01:29 PM
 
3,780 posts, read 8,198,110 times
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Quote:
Originally Posted by vwgto View Post
Looking to purchase a home in Colorado, now living in a paid-off home in Texas. Would like to buy in Colorado first. Have resources for 20%+ down payment, but not enough to buy the new home outright without selling old first. Once old home is sold, I would likely pay-off any loans related to the new purchase. In order to minimize fees, does it make more sense to get a home equity loan on old or to get a new mortgage on the purchase (given the expected short turnaround)? No credit issues, employed, no debt. The loan would be approx 30-35% of new purchase.
Several reasons why:

Much lower fees.

And if you pay off the new mortgage before you make six payments, the lending branch, and loan officer, have all revenue (entire paycheck) from the loan ripped from their accounts. So that's more of a karma thing.
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Old 01-10-2019, 07:25 PM
 
Location: Phoenix, AZ
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An alternative is to sell your home in Texas and go rent someplace in Colorado for 6 months while you get the lay of the land and figure out what part of town is best to live in. Then buy for cash.


Another advantage to that is that you can avoid the vultures at banks and mortgage companies with all their draconian bulls--t.
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Old 01-11-2019, 10:43 AM
 
199 posts, read 93,789 times
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Originally Posted by adjusterjack View Post
An alternative is to sell your home in Texas and go rent someplace in Colorado for 6 months while you get the lay of the land and figure out what part of town is best to live in. Then buy for cash.


Another advantage to that is that you can avoid the vultures at banks and mortgage companies with all their draconian bulls--t.
Are you only in the mortgages threads for trash talk? Some mortgage professionals actually care about people and helping them get into a home. Obviously, if someone can pay cash for a house, that's fantastic and I'd definitely encourage it, but most people can't do that. Smearing an entire industry of people and instilling fear in home buyers isn't helpful. We work really hard to get our clients what they want and make sure they're not painting themselves into a financial corner. There are bad apples in every industry, but your vitriol doesn't serve a purpose in answering the OP's questions.
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Old 01-11-2019, 10:57 AM
 
199 posts, read 93,789 times
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Quote:
Originally Posted by vwgto View Post
Looking to purchase a home in Colorado, now living in a paid-off home in Texas. Would like to buy in Colorado first. Have resources for 20%+ down payment, but not enough to buy the new home outright without selling old first. Once old home is sold, I would likely pay-off any loans related to the new purchase. In order to minimize fees, does it make more sense to get a home equity loan on old or to get a new mortgage on the purchase (given the expected short turnaround)? No credit issues, employed, no debt. The loan would be approx 30-35% of new purchase.
A HELOC is always going to be faster, easier, and cheaper than a conventional mortgage. I'd recommend that, provided you know the area you're moving to well enough to scope out your favorite neighborhoods and buy right away. If you're not sure what part of town you want to buy in, it's worth taking some time renting to find that out.

As another responder pointed out, if you pay off a conventional mortgage within 6 months of taking it out, your loan originator will take a financial hit. In some cases, the lender even puts a bit of a black mark on their account, affecting the pricing they can get for future clients. Not that you're personally responsible for the whole mortgage industry; that's just a little nugget of info.
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