Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Trying to sell my multi-family unit (2 fam house) and buy a single fam in different town. It's pretty much impossible to buy/sell (contingency) at same time now due to the hot market. Option is to sell, rent than buy but would prefer to buy 2nd home, then either rent or offload the multi family unit.
My understanding is, I have 3 options, HELOC, Cash out Refi or Home Equity Loan (Or save for downpayment) but I am looking at doing this within the next 6 months.
My multi-fam home would sell for 575-635k (in North NJ) and I owe about 330k on it. Once I sell home I will pay off the HELOC/Home Equity/Refinance Mortgage. I am looking at purchasing a 800-900K home and my understanding is I would need 10% down for a second home?
Would this be doable, if I make an offer on a house, should I wait till offer is accepted before I apply for HELOC/Line of Credit (how long is approval/funding process) or should I apply for and get funded when I start looking (don't want to pay interest for months im not utilizing the $). Are there any penalty or fees for paying off the HELOC/Line of Credit after I sell my multi-family dwelling? Does anyone have any other suggestions/ideas?
Your lender will tell you you will have to qualify to carry the HELOC and the mortgage on the new property in addtion to your current note.
Can you qualify?
If you can, get the HELOC before you shop.
Recognize, most HELOCs are limited to 80% of your property value, minus the first mortgage balance. Some are limited to 70%, which makes it even tighter.
IF your duplex appraises at $635,000 and you owe $330,000, your max HELOC is likely going to be about $178,000.
( $635,000 x 80% = 508,000 - $330,000 1st mortgage = $178,000 equity to be tapped for HELOC.)
And, you will have to qualify for the HELOC and the new home on top of your current mortgage on the duplex.
$680,000 mortgage on new home ($850,000 purchase@ 80% + Current mortgage + $178,000 HELOC.) Lots of debt to service.
I think you end up selling, moving, and starting with a simpler slate. More hassle, but simpler financial process.
Trying to sell my multi-family unit (2 fam house) and buy a single fam in different town. It's pretty much impossible to buy/sell (contingency) at same time now due to the hot market. Option is to sell, rent than buy but would prefer to buy 2nd home, then either rent or offload the multi family unit.
My understanding is, I have 3 options, HELOC, Cash out Refi or Home Equity Loan (Or save for downpayment) but I am looking at doing this within the next 6 months.
My multi-fam home would sell for 575-635k (in North NJ) and I owe about 330k on it. Once I sell home I will pay off the HELOC/Home Equity/Refinance Mortgage. I am looking at purchasing a 800-900K home and my understanding is I would need 10% down for a second home?
Would this be doable, if I make an offer on a house, should I wait till offer is accepted before I apply for HELOC/Line of Credit (how long is approval/funding process) or should I apply for and get funded when I start looking (don't want to pay interest for months im not utilizing the $). Are there any penalty or fees for paying off the HELOC/Line of Credit after I sell my multi-family dwelling? Does anyone have any other suggestions/ideas?
Thanks...
With no more equity than you have in your current home and wanting to purchase another home that's considerably more expensive than your present home, I think you're going to find it extremely difficult to do.
Your best bet is to sell your current place first, put your furniture in storage, and find something furnished for temporary living while you shop for a new house. Even then, you're only going to have perhaps $300K for a down payment on a $800K to $900K house. This means that you will need to get a loan of $500K to $600K to buy the new house.
And all of these numbers don't take into consideration any costs (such as commissions) for selling your present home, storing your furniture, moving your stuff twice, or closing costs on the new home. Unless you have other very substantial assets, I seriously doubt that you would be approved for owning two homes with three different mortgages at the same time. I think your best bet is to sell your place first.
My recommendation is to see if you can purchase your dream home without selling your current, then you can purchase non-contingent. Can you tap into other assets without destroying your life? If you qualify, then sell the present home post-closing. Without knowledge of your income, I would not listen to anyone suggesting you do not qualify.
You do need to be careful about the HELOC. You would need to be upfront about the purpose, as most Notes have an expectation (it's in the Note) of owner occupancy. Your new lender would want to see the HELOC Note.
My recommendation is to see if you can purchase your dream home without selling your current, then you can purchase non-contingent. Can you tap into other assets without destroying your life? If you qualify, then sell the present home post-closing. Without knowledge of your income, I would not listen to anyone suggesting you do not qualify.
You do need to be careful about the HELOC. You would need to be upfront about the purpose, as most Notes have an expectation (it's in the Note) of owner occupancy. Your new lender would want to see the HELOC Note.
Good luck!
Perhaps you missed the statement in my post above which covered your concerns. "Unless you have other very substantial assets, I seriously doubt that you would be approved for owning two homes with three different mortgages at the same time."
Or perhaps you think the OP simply forgot to mention the quarter million dollars that he has sitting idly in his checking account or his baseball card collection worth $300K?
Your prior posts insinuate he will not qualify. With strong income and a 401 for 2 months reserves, this borrower could be just fine - especially in a locale where inventory is in high demand.
Quote:
And, you will have to qualify for the HELOC and the new home on top of your current mortgage on the duplex. $680,000 mortgage on new home ($850,000 purchase@ 80% + Current mortgage + $178,000 HELOC.) Lots of debt to service.
With no more equity than you have in your current home and wanting to purchase another home that's considerably more expensive than your present home, I think you're going to find it extremely difficult to do.
Everyone is different and only a qualified mortgage professional can provide you with your options.
With no more equity than you have in your current home and wanting to purchase another home that's considerably more expensive than your present home, I think you're going to find it extremely difficult to do.
Your best bet is to sell your current place first, put your furniture in storage, and find something furnished for temporary living while you shop for a new house. Even then, you're only going to have perhaps $300K for a down payment on a $800K to $900K house. This means that you will need to get a loan of $500K to $600K to buy the new house.
And all of these numbers don't take into consideration any costs (such as commissions) for selling your present home, storing your furniture, moving your stuff twice, or closing costs on the new home. Unless you have other very substantial assets, I seriously doubt that you would be approved for owning two homes with three different mortgages at the same time. I think your best bet is to sell your place first.
Without knowing the OP’s income you would have no idea if they would qualify or not. The OP might easily qualify to do this.
Your lender will tell you you will have to qualify to carry the HELOC and the mortgage on the new property in addtion to your current note.
Can you qualify?
If you can, get the HELOC before you shop.
Recognize, most HELOCs are limited to 80% of your property value, minus the first mortgage balance. Some are limited to 70%, which makes it even tighter.
IF your duplex appraises at $635,000 and you owe $330,000, your max HELOC is likely going to be about $178,000.
( $635,000 x 80% = 508,000 - $330,000 1st mortgage = $178,000 equity to be tapped for HELOC.)
And, you will have to qualify for the HELOC and the new home on top of your current mortgage on the duplex.
$680,000 mortgage on new home ($850,000 purchase@ 80% + Current mortgage + $178,000 HELOC.) Lots of debt to service.
I think you end up selling, moving, and starting with a simpler slate. More hassle, but simpler financial process.
Quote:
Originally Posted by SmartMoney
Your prior posts insinuate he will not qualify. With strong income and a 401 for 2 months reserves, this borrower could be just fine - especially in a locale where inventory is in high demand.
" ME: Can you qualify?......
And, you will have to qualify for the HELOC and the new home on top of your current mortgage on the duplex. $680,000 mortgage on new home ($850,000 purchase@ 80% + Current mortgage + $178,000 HELOC.) Lots of debt to service.
Chuckles:
With no more equity than you have in your current home and wanting to purchase another home that's considerably more expensive than your present home, I think you're going to find it extremely difficult to do."
Everyone is different and only a qualified mortgage professional can provide you with your options.
I think you conflated my post with Chuckles' post. And actually, he recommended a qualified mortgage pro to provide options.
While I posted "Lots of debt to service," I also asked, "Can you qualify?" Surely, also, I wish I was more perfectly clear that the OP should consult a trusted lender.
You money people are so clear on requirements and details, I would NOT step on your toes, or discourage the OP of the thread to the point they would not investigate options.
I was in the same shoes as you and found knock<dot>com to be the closest mainstream solution without finding private bridge loans. A couple downsides but not big. There are couple other places that have a somewhat similar "tradein" program such as opendoor but I found knock to be the closet.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
knock com
