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Old 02-01-2016, 06:52 AM
 
Location: Homeless
17,717 posts, read 13,463,847 times
Reputation: 11993

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The housing market isn't all that great these days. It's got some what better but not great.
I understand you can take out a loan against your house to the bank for repairs etc. If your house was worth say $100,000 & you were trying to sell it, is it possible to take out a loan for your house or mortgage it to the bank & go & buy another house/land? If said house has been on the market for say two years & you had found house/land that you wanted to buy, could you use the loan against the house to buy it? Would it be worth it? Would one feel the need to be insane to do so? Would the bank just take the house & keep it & sell it themselves? Would it be worth it? I know it wouldn't be as simple thing to do.
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Old 02-01-2016, 08:29 AM
 
1,334 posts, read 1,663,811 times
Reputation: 4232
This kind of "creative scheming" was one cause of the bubble/crash of 2008. It's kind of appalling how short our memories are.
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Old 02-01-2016, 08:37 AM
 
Location: Mount Laurel
4,187 posts, read 11,890,995 times
Reputation: 3512
Yes
No
Maybe


Anything is possible in life.


Can you get a lender to loan you money using equity in your home? Do you have equity?
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Old 02-01-2016, 09:10 AM
 
Location: Columbia SC
14,210 posts, read 14,620,413 times
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In my last home purchase we got a home equity loan on a mortgage free home to have the money (cash) to buy our new home built. This was with BoA and it went right through.
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Old 02-01-2016, 11:03 AM
 
Location: Homeless
17,717 posts, read 13,463,847 times
Reputation: 11993
Quote:
Originally Posted by sj08054 View Post
Yes




Can you get a lender to loan you money using equity in your home? Do you have equity?


This was just a general question. I had read up on this some where & to me it looked VERY risky.
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Old 02-01-2016, 11:13 AM
 
Location: Raleigh NC
25,119 posts, read 16,129,720 times
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I don't know what you've been reading.

You're not likely to get any type of change to your financing on your current home if it's listed for sale.

The bank never sells the first house for you, unless you default on the loan. The Bank has lent you money, and you've agreed to pay it back. Because it's a lot of money, they've taken the house as collateral, but the sale of the house is not considered their repayment source. You are.
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Old 02-02-2016, 04:14 PM
 
Location: North Idaho
32,548 posts, read 47,663,179 times
Reputation: 78003
If your current house is free and clear, then you might be able to take out a mortgage for 80% of that house's value. If the house was free and clear, you would be getting a first mortgage.

I don't see any advantage of that over just buying the new place you want with a mortgage on the new place.

You wouldn't take out a mortgage on your house, buy a new house, and walk away from the old house. The bank is only going to loan you 80%, so you would be walking away from 20% of the value. Also, you might be paying about $5,000 origination fees to get the mortgage on the house you don't want.

A new mortgage is likely to be an owner occupied mortgage, so you can't rent that first house out; you must live in it.

If you are happy to get 80% of the house's value, just list it for 20% lower than fair market value. That would sell it quickly.
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