Author Topic: Buying a new home with a home equity line of credit?  (Read 1778 times)

maxpower

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Buying a new home with a home equity line of credit?
« on: September 12, 2015, 08:42:27 AM »
Hey all!

My family and I are about to downsize in the house department. We've paid off our $146,000 home (with the exception of a $15,000 interest-free first time home buyers loan) and are looking at buying a home in the sub $100,000 range. We're looking at ways to finance the new place while we seek to sell the current place. I'm considering taking out a home equity line of credit to pull this off, but I'm not really familiar with these instruments. Anyone have some helpful perspective on this? I'm really looking to avoid as much of the various closing costs, etc. as I can.

Thanks in advance!

forummm

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Re: Buying a new home with a home equity line of credit?
« Reply #1 on: September 12, 2015, 10:41:50 AM »
You could also just get a mortgage on the new place and get rebate points (higher interest rate, no closing costs) and then pay off the new mortgage whenever you want. Home equity loan sounds fine too. Having the ability to pay cash speeds up the buying process a bit. Just make sure the house is actually worth what you pay for it since you won't have the lender's appraisal as a backstop.

maxpower

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Re: Buying a new home with a home equity line of credit?
« Reply #2 on: September 13, 2015, 07:26:49 PM »
Thanks forummm,
I'm leaning towards the rebate point route. Seems like it might help me avoid the most closing cost $. Thanks!

SwordGuy

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Re: Buying a new home with a home equity line of credit?
« Reply #3 on: September 13, 2015, 07:31:53 PM »
Pentagon Federal Credit Union will eat the closing costs if you keep the loan active for a few years.  I forget how many.

But get the HELOC early and ride their ass through the whole process because, in my very recent experience, they are incompetent and lazy at doing the work of getting the loan process done in a reasonable amount of time.  You also won't be able to get a proof of funding letter to show the seller of the other house.




Drifterrider

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Re: Buying a new home with a home equity line of credit?
« Reply #4 on: September 14, 2015, 06:05:03 AM »
Hey all!

My family and I are about to downsize in the house department. We've paid off our $146,000 home (with the exception of a $15,000 interest-free first time home buyers loan)

Do you have the loan you have to repay (before 1 Jan 2009) or the one you don't?

If it is the prior, remember you have to repay in a lump sum if you sell to let the house.