| Posted By |
Message |
DjPiLL
Mr. & Mrs. Pill
Member since 4/04 4198 total posts
Wedding Date:
5/28/2005 5:00 PM
Wed. Location:
Swan Club A+
|
Tapping the Equity in your house - Buying new property - Secrets?
I figured I would start a good topic about this... since its not commonly talked about and its not a topic I can say I am an expert at so I am looking for some advice.
I will be looking for a house sometime late this summer. I have a couple of buks saved I can use for DP and CC. But ideally i'd like to tap into the 80k or so equity I have in my co-op. If I can pull cash out of my co-op... I will be able to put down 20%. Doing this will make my offers on houses much stronger than the others who can only put 5-10%.
I am just curious what other people did that owned a property... and decided to "upgrade" to something better. How did you get access to the cash in your current place to put down a nice DP.
I am considering doing a quick re-fi right before I start looking to cash out all my equity. Not sure what other options are available.
Thoughts on this subject?
Message edited 5/7/2005 6:57:55 PM.
|
Posted 5/7/05 6:56 PM 
|
| |
|
september2004
It's An Obsession
Member since 9/03 3384 total posts
Wedding Date:
9/18/2004 2:00 PM
Wed. Location:
|
Re: Tapping the Equity in your house - Buying new property - Secrets?
good question...
would it make sense to use that extra $$ towards renovations in a new home to cash out even more in the future (i.e. increase the foot space of a smaller home, not cosmetic updates)? something i would perhaps look into...
|
|
Posted 5/7/05 7:28 PM
|
| |
|
DjPiLL
Mr. & Mrs. Pill
Member since 4/04 4198 total posts
Wedding Date:
5/28/2005 5:00 PM
Wed. Location:
Swan Club A+
|
Re: Tapping the Equity in your house - Buying new property - Secrets?
Well I would want to do it to have more money to put down... to make stronger bidding offers.
I would really like to be able to put 20% down on a 400k house.
Some people would rather put less down and have cash to put towards home improvements. But I would rather put more down up front and pay less interest by avoiding 80/15/5 loans or paying PMI.
Finding cheap or free financing for home improvements isn't too difficult. Lets say you want to fund a 8k bathroom renovation. You could easily put this on a credit card... and then quickly move it over to a 0% balance transfer fee card thats usually very easy to find.
|
|
Posted 5/7/05 11:03 PM
|
| |
|
cocoa
I love my mer-man!!!
Member since 1/04 5869 total posts
Wedding Date:
8/8/2004 12:00 PM
Wed. Location:
thatched cottage
|
Re: Tapping the Equity in your house - Buying new property - Secrets?
i'm no expert on this but there was another thread on this board that had people saying it didn't matter to the seller how m;uch you put down b/c they don't get the money till the end anyway. just wanted to toss that your way so that you can keep your money making interest a little bit longer if necesaary.
|
|
Posted 5/8/05 10:55 AM
|
| |
|
DjPiLL
Mr. & Mrs. Pill
Member since 4/04 4198 total posts
Wedding Date:
5/28/2005 5:00 PM
Wed. Location:
Swan Club A+
|
Re: Tapping the Equity in your house - Buying new property - Secrets?
It depends on how you structure the contract.
You can very easily give the seller 20% at contract if need be. Or sometimes you do it on a schedule... like 10% at signing... and maybe another 10% a month into contract.
The buyer of my last deal did 20% down. My lawyer had all 20% in her escrow account a month before we went to close.
|
|
Posted 5/8/05 12:55 PM
|
| |
|
LisaT
........
Member since 7/01 5896 total posts
Wedding Date:
4/27/2002 11:00 AM
Wed. Location:
Lands End
|
Re: Tapping the Equity in your house - Buying new property - Secrets?
You really need to look at whether its worth the cost of a refi if you're planning on selling and cashing out soon after...
|
|
Posted 5/8/05 10:49 PM
|
| |
|
computergirl
Board Enthusiast
Member since 3/05 105 total posts
Wedding Date:
10/5/2002 12:00 AM
Wed. Location:
|
Re: Tapping the Equity in your house - Buying new property - Secrets?
I am just curious what other people did that owned a property... and decided to "upgrade" to something better. How did you get access to the cash in your current place to put down a nice DP.
We just did this-- decided to sell our house to upgrade to a better one. We ended up not accessing any savings for a hefty DP, we only put down 10% at contract using some savings. However, we're obtaining a bridge loan at the end of the month that will cover the amount we expect to roll into the new house, from the sale of our current one. We'll have 90 days of no payments, but we're supposed to be going to contract by the end of the week w/ the buyer on our current house (who is doing a cash deal), so maybe we can time the two closings correctly and not need the bridge financing at all.
Once we do sell the house, we'll ultimately have
more than 50% down on our new home. Can you set up financing like this for your co-op? I actually thought this is what everybody did, but I'm not really savvy about all this. We're using Chase, FM for any details you want.
Message edited 5/9/2005 9:28:10 AM.
|
|
Posted 5/9/05 9:27 AM
|
| |
|
DjPiLL
Mr. & Mrs. Pill
Member since 4/04 4198 total posts
Wedding Date:
5/28/2005 5:00 PM
Wed. Location:
Swan Club A+
|
Re: Tapping the Equity in your house - Buying new property - Secrets?
This is the type of info I was looking for.
Funny how I have chase for my current loan too. Did you have to use Chase for everything? Both loans... in order to do this?
|
|
Posted 5/9/05 9:30 AM
|
| |
|
computergirl
Board Enthusiast
Member since 3/05 105 total posts
Wedding Date:
10/5/2002 12:00 AM
Wed. Location:
|
Re: Tapping the Equity in your house - Buying new property - Secrets?
I don't know if we HAD to use Chase for both loans, but we are-- the 30-year fixed that 's going to be our primary mtg, and then the possible bridge loan. We picked them because we already bank with Chase and they gave us a good deal-- minimal bank closing costs.
An interesting option Chase told me about-- in addition to creating a bridge loan just for the amount of profit you expect to roll into the new home, you can also make it a bigger loan and have it also encompass your entire existing mortgage on your current home-- thus you are essentially paying off the mortgage on your current home using this loan. That way, with the 90 days of no payments, you can improve your cash flow by having no monthly mtg payment on your existing home, in case you haven't sold it by the time you close on your new home. We're not sure yet if we're going to do this though.
|
|
Posted 5/9/05 9:35 AM
|
| |
|
bxgell2
Baby Beer is on the way!
Member since 2/04 1048 total posts
Wedding Date:
10/31/2004 12:00 PM
Wed. Location:
Southampton Inn
|
Re: Tapping the Equity in your house - Buying new property - Secrets?
Posted by DjPiLL
Finding cheap or free financing for home improvements isn't too difficult. Lets say you want to fund a 8k bathroom renovation. You could easily put this on a credit card... and then quickly move it over to a 0% balance transfer fee card thats usually very easy to find.
Yup, that's what we did. We put 20% down so we got a really good interest rate with no PMI, and then funded out renovations, which cost about $10k, using our credit cards, which we moved to a zero interest card. We took our time paying off the balance while the zero interest rate still applied, and just made our final payment in March, exactly one year after we bought the house 
|
|
Posted 5/9/05 10:32 AM
|
| |
|
FTRBRIDE
Mrs. R, Esq.
Member since 9/04 1438 total posts
Wedding Date:
9/4/2005 6:00 PM
Wed. Location:
Harrison House
|
Re: Tapping the Equity in your house - Buying new property - Secrets?
If you find a house that you really like you could take out a line of credit on your current home, and use that money to put towards the down payment. Then when you sell your current home you can pay off the line of credit immediately. The only problem is that if you do this, and then it takes you awhile to find a house you like, or it takes you longer than expected to sell your home or you get less than you were hoping, the line of credit isn't fixed and you could end up paying too much in interest. You have time it correctly.
|
|
Posted 5/9/05 11:59 AM
|
| |
|
bride082003
Mommy's Little Boy
Member since 8/02 2276 total posts
Wedding Date:
1/1/2003 12:00 PM
Wed. Location:
Giorgio's
|
Re: Tapping the Equity in your house - Buying new property - Secrets?
we did a refi on our townhome to take out cash for to allow us to put 20% down on our current house. We now rent out the townhouse.
|
|
Posted 5/9/05 4:56 PM
|
| |
|
bride082003
Mommy's Little Boy
Member since 8/02 2276 total posts
Wedding Date:
1/1/2003 12:00 PM
Wed. Location:
Giorgio's
|
Re: Tapping the Equity in your house - Buying new property - Secrets?
Posted by FTRBRIDE
If you find a house that you really like you could take out a line of credit on your current home, and use that money to put towards the down payment. Then when you sell your current home you can pay off the line of credit immediately. The only problem is that if you do this, and then it takes you awhile to find a house you like, or it takes you longer than expected to sell your home or you get less than you were hoping, the line of credit isn't fixed and you could end up paying too much in interest. You have time it correctly.
Just be careful with LOC, unless you can find a fixed rate most of them are adjustable with a low intro rate, if you can lock in a low refi rate Id say go for that.
|
|
Posted 5/9/05 4:57 PM
|
| |
|
