Is using a HELOC on our existing home to finance a downpayment on a newer home a good idea?

Answers:1   |   LastUpdateAt:2012-11-02 06:49:02  

Question
Ignatius
Asked at 2012-09-12 21:37:05
My mortgage broker has suggested using a HELOC on our existing home to pay a down payment on a new house . MedlinePlus We own our existing home in 15k 70k assesed a small home renovation loan . MedlinePlus We are looking at houses that cost around 125,000 and they would need about 25,000 down. MedlinePlus We are assuming that we can sell our current home at least 55000k on a fast track if necessary . MedlinePlus We have good income for 2 payments would not be a short-term problem more . MedlinePlus Any advice on this matter ? MedlinePlus Any pros and cons to consider ? MedlinePlus MedlinePlus Thanks in advance for your time .
Answer1TimishaAnswered at 2012-11-02 06:48:15
Why would you want to get a HELOC at a higher interest rate than what you could get a new loan for?

If your home current home is assessed at $85,000 why would you sell for $55,000 and buy another home for $125,000? You really should just put your home on the market and get closer to what it is worth and what you can settle with. If you just wait and sell your current house for closer to what it is worth you will come up with the down payment you need.

A HELOC can be demanded to be paid in full if you sell the equity that you have in the house. Fraud fraud fraud, GO TO ANOTHER LENDER RIGHT NOW AND REPORT YOUR BROKER!
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