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CaMacho
Sisters :)
Member since 7/06 15112 total posts
Name:
Jess
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Question about HELOC or 2nd Mortgage...
How long do you have to wait after you buy a house to get a Home Equity line of credit or 2nd mortgage?
Also, which would you choose and why?
Any other options besides these two? They'd need about $30-50k.
(Asking for a friend who bought 3 months ago and is interested in doing this.)
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Posted 2/18/08 2:30 PM  |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Question about HELOC or 2nd Mortgage...
There is no waiting period that I know of. You can apply the day after you close if you want, as long as you have the proper equity in your house.
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| Posted 2/18/08 2:34 PM |
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CaMacho
Sisters :)
Member since 7/06 15112 total posts
Name:
Jess
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Re: Question about HELOC or 2nd Mortgage...
Posted by ave1024
There is no waiting period that I know of. You can apply the day after you close if you want, as long as you have the proper equity in your house.
Might be a dumb question, but does the equity they have need to be the same as the amount they want to take the loan out for?
I think they put a small down payment.
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| Posted 2/18/08 2:38 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Question about HELOC or 2nd Mortgage...
Posted by CaMacho
Posted by ave1024
There is no waiting period that I know of. You can apply the day after you close if you want, as long as you have the proper equity in your house.
Might be a dumb question, but does the equity they have need to be the same as the amount they want to take the loan out for?
I think they put a small down payment.
The bank you are getting the line of credit from will do their own appraisal. So the amount of equity you actually have will be up to them to decide, pending an appraisal.
It doesn't hurt to tell them what you bought the house for and what you owe to determine equity, but they will probably work that out themselves.
With that said if you bought a house for 400k and put down 20k, that doesnt mean another lender will give you up to 20k. They may only give 10k or 5k tops if they feel the house is worth less. Could be the other way around too, if they think the house is worth 420k you may be able to get more.
Message edited 2/18/2008 2:42:30 PM.
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| Posted 2/18/08 2:41 PM |
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CaMacho
Sisters :)
Member since 7/06 15112 total posts
Name:
Jess
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Re: Question about HELOC or 2nd Mortgage...
Got it! Thanks for the info... i'll pass it along.
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| Posted 2/18/08 2:44 PM |
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csorisi
My 2 LOVES
Member since 11/05 1984 total posts
Name:
Corinne
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Re: Question about HELOC or 2nd Mortgage...
They are going to have to wait until their 1st mortgage is of record before they can take out a line of credit. there has to be equity in thier home equal to the amount they want to take out and where the bank is satisfied.
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| Posted 2/18/08 3:50 PM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Question about HELOC or 2nd Mortgage...
I could have swore my DH said you have to wait 6 months
I can double check later
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| Posted 2/18/08 4:27 PM |
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lakrav
LIF Infant
Member since 8/07 89 total posts
Name:
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Re: Question about HELOC or 2nd Mortgage...
Just so you know most banks will use the purchase price of the house as the value if it was bought in the last year. With that said, if the borrower did not put down more then 20% the rate on the HELOC is going to be high. Few banks wwant to do HELOCs if the total with the 1st and 2nd mtg is over 80%.
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| Posted 2/18/08 4:33 PM |
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CaMacho
Sisters :)
Member since 7/06 15112 total posts
Name:
Jess
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Re: Question about HELOC or 2nd Mortgage...
BUMP
DH and I are now looking at a home that is a foreclosure so we might be looking to do this ourselves since it'll need work done right away.
Beth - did you ever ask your DH about waiting 6 months before getting a home equity loan?
I know it's based on what your home is appraised for... so if it's appraised for more than we pay, will we be able to get a loan right away?
Would you recommend a HELOC or HELOAN?
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| Posted 3/27/08 11:16 AM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Question about HELOC or 2nd Mortgage...
Posted by CaMacho
BUMP
DH and I are now looking at a home that is a foreclosure so we might be looking to do this ourselves since it'll need work done right away.
Beth - did you ever ask your DH about waiting 6 months before getting a home equity loan?
I know it's based on what your home is appraised for... so if it's appraised for more than we pay, will we be able to get a loan right away?
Would you recommend a HELOC or HELOAN?
I will ask him and get back to you
I know he made a comment about my brother getting a HELOC after closing on this house in FL and having to wait 6 months
I will FM you
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| Posted 3/27/08 11:23 AM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Question about HELOC or 2nd Mortgage...
What is this deal with waiting that keeps going around here?
I closed on my house and had a fixed rate mortgage and a HELOC set up at the same time at the closing table. There was no wait involved and my mortgage and HELOC were with two separate banks.
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| Posted 3/27/08 11:30 AM |
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laurabora
LIF Adult
Member since 4/07 2712 total posts
Name:
Laura
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Re: Question about HELOC or 2nd Mortgage...
If I remember correctly, our mortgage had to be "seasoned" for a year before we were eligible for a HELOC. It may vary based on who the mortgage is through though.
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| Posted 3/27/08 11:35 AM |
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Re: Question about HELOC or 2nd Mortgage...
It depends on the lender from whom you are getting the second mortgage...
Some of them, if it's within a year of purchase, will value the home at the purchase price. So if you put 20% down, you have 20% equity to play with. That said, most of them won't lend over 90% at this point.
For some lenders, they will do their own appraisal and use that value, but in this "declining" market, that isn't necessarily in your favor either...
FM me if you need more info (I work for a mortgage broker)
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| Posted 3/27/08 12:00 PM |
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Re: Question about HELOC or 2nd Mortgage...
Posted by ave1024
What is this deal with waiting that keeps going around here?
I closed on my house and had a fixed rate mortgage and a HELOC set up at the same time at the closing table. There was no wait involved and my mortgage and HELOC were with two separate banks.
That is getting a first and second mortgage to purchase the home, and as long as your first and second mortgage lenders are agreeable to the higher loan-to-value, it can be done (again, most are maxed at 90% these days)....
But if you close with just a first mortgage and want a home equity later, you may have to wait in order for the bank to use an appraised value versus simply using the purchase price.
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| Posted 3/27/08 12:02 PM |
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MST9106
My life:)
Member since 6/06 9589 total posts
Name:
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Re: Question about HELOC or 2nd Mortgage...
Just a question since some of you are pretty knowledgeable in this area...Aren't HELOC's risky these days? And aren't they based on ARMS?
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| Posted 3/27/08 12:24 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Question about HELOC or 2nd Mortgage...
Posted by MST9106
Just a question since some of you are pretty knowledgeable in this area...Aren't HELOC's risky these days? And aren't they based on ARMS?
HELOCs are based on the prime rate which is adjustable and changes every time the fed decides to do something stupid.
Are they risky? They are only risky if you borrow up to any equity that you may have had.
If you have 200k in equity and need to borrow 50k, then it's not really risky. Just make sure you can afford the payments at a conservative interest rate to prepare for any future interest rate increases. I would say 9% to be on the safe side (although the HELOC rates are much lower currently).
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| Posted 3/27/08 12:27 PM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Question about HELOC or 2nd Mortgage...
DH said- that it's getting harder to do this now- b/c the value is not there like it was 2 years ago
2 years ago when you bought a house- the bank assumed that they value would go up and up
now- they are not making that assumption
Unless you put alot down or there is an exrordinary diference in value and a good reason and I dont mean b/c the appraisal was for 30k more.
I would assume if the house was a foreclosure and you could show the value was there it would be easier to do
but if you think about it- a HELOC is a loan against your equity- so if you just purchased a house- and put less then 20% down- there wouldn't be alot of equity yet
these loans were not inteded to be taken out right after you purchase a home- they are for down the road to make imporvements or repairs
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| Posted 3/27/08 1:20 PM |
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JandJ1224
Member since 6/06 5911 total posts
Name:
Jannette
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Re: Question about HELOC or 2nd Mortgage...
Maybe you can just put less down and your use your cash for the repairs you want to do
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| Posted 3/27/08 2:12 PM |
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CaMacho
Sisters :)
Member since 7/06 15112 total posts
Name:
Jess
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Re: Question about HELOC or 2nd Mortgage...
Posted by JandJ1224
Maybe you can just put less down and your use your cash for the repairs you want to do
Since it's a foreclosure they require a certain amount down (as per the listing... we'll find out tonight for sure). Plus, we'd need much more $$ for repairs than what we will give for a down payment.
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| Posted 3/27/08 2:32 PM |
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