Question
Mortgage /Home Equity Question?
I currently own my home, and I've never had a mortgage, I paid in cash for it. Now, I am thinking of using this residence as a rental and buying a new home, as I need to relocate across the country and I prefer not to sell in a down market. I would say my credit is fair...not excellent with a few medical bill blemishes. When I apply for a loan at the bank, can I use my home equity to secure it? Or will I need to apply for an unsecured mortgage? Any help on this would be greatly appreciated. I already own this home free and clear. I have never mortgaged it. This will be the first time I'm getting a mortgage. I can afford it.....I'm not really considering defaulting to be an issue. I just need to know what type of loan I need.
3 months ago - 2 answers
Best Answer
Chosen by Asker
Yes, you can probably do this. A few medical blips may not be a problem at all, depending on what they are, how old and the lender's policy. We tend to ignore them if they're under $1000 anyway. You can get a home equity loan and use the funds anyway you want. If you've already left that home, we won't call it a home equity loan, but you can still get cash out on rental property, although it will be at a higher rate and a lower loan-to value ratio. I didn't get the idea you were considering default, just not wanting to sell in this soft market and that you need to leave the area.
by daeve930
3 months ago
Asker's Rating: 
Other Answers
You are turning the property into a rental is considered an investment and lenders look at loans for those differently. You should consult with a financial adviser first. To see if it's possible for you to do this at this time. No sense in moving, buying and having to default on one of them in the near future. Protect your credit, seek advise on financing first, then talk with lenders if appropriate.
by Alterfemego- 3 months ago