Author Topic: Home Equity Loan for New Property?  (Read 1075 times)

mountainjillian

  • 5 O'Clock Shadow
  • *
  • Posts: 15
Home Equity Loan for New Property?
« on: October 08, 2015, 01:56:15 PM »
Hi friends!

My husband and I bought a KICK ASS condo in a resort community in 2012 that has since appreciated at least $100K in value. We are really interested in owning a single family home now. The rental market around here is kick-ass, so we can most definitely cover our mortgage and then some on the condo. IF we could take out a home equity loan to cover a down payment on a single family home, and cover both our condo mortgage payment and the home equity loan payment through the rent we'd get on the condo - should we do that?

Or should we sell and just keep things simple?

Thank you for the advice!!

CashFlowDiaries

  • Stubble
  • **
  • Posts: 178
  • Location: Indianapolis, IN
  • Follow me on my journey to Financial Freedom!
    • Cash Flow Diaries
Re: Home Equity Loan for New Property?
« Reply #1 on: October 09, 2015, 12:07:55 PM »
If the numbers make sense then yeah you should do that.  Make sure you account for all the HOA fees, future vacancies, future maintenance/repairs and stuff when running your numbers.

ShoulderThingThatGoesUp

  • Magnum Stache
  • ******
  • Posts: 3057
  • Location: Emmaus, PA
Re: Home Equity Loan for New Property?
« Reply #2 on: October 11, 2015, 06:33:39 AM »
Elsewhere you mentioned that you have a 6.8% student loan. If you're pulling out equity, you should bulldoze that student loan into a hole and set it on fire because a 6.8% guaranteed return doesn't just come knocking on your door.

Bearded Man

  • Handlebar Stache
  • *****
  • Posts: 1142
Re: Home Equity Loan for New Property?
« Reply #3 on: October 24, 2015, 01:19:34 AM »
I disagree. I had about 20k ok n sl at 6.8% 5 years ago. I put my whopping 64k savings at the time into a paid off house. I've netted 40k to date, and the house has more than doubled in value. 125k total profit. Sometimes investing is better. Plus, a paid off sl doesn't feed me (homestead) or provide shelter. A house does.

andyp2010

  • 5 O'Clock Shadow
  • *
  • Posts: 93
  • Location: NZ
Re: Home Equity Loan for New Property?
« Reply #4 on: October 24, 2015, 04:41:06 AM »
Can you not reuse the equity to get another mortgage? Why do you need a cash downpayment? Have you talked this through with a broker?