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Can you use the money from your home equity loan to buy another house? Say I remodel my house, end up with 30k in equity, and take out a home equity loan for that amount. Can I turn around and use that 30k as a down payment on another property? Edit: The new property would be used to renovate/flip and sell.
By VR4Jen Posted on 06/18/09 Total Answers 3
Answers-
I'd assume so, that is if any lender would touch someone with multiple mortgages these days.
Answer by : PoliPino On Date 2009-06-18 14:09:55
You could yes, it would then become and investment loan.I'm assuming you would buy this second house for a rental investment? If so then you can write this loan off at the end of the year against your taxable income, and this would make you a landlord.
Answer by : Dorothy B On Date 2009-06-18 14:12:31
Heck yes! There are no restrictions on how you can use your HELOC. Here's the deal, when purchasing another property, the new lender MAY want to "source" the funds for the down payment. Via your credit report, they'll see that you drew the funds from the HELOC. This MAY be a problem to the new lender. It depends on the LTV (loan to value ratio) of the new purchase (under 60-70% they won't care), or excellent credit. Also, if you can show your account has plenty cash anyways, it will be moot. The lender USUALLY likes the down payment to be from your hard-earned bank account, and NOT from an "equity line gamble." You may want to let the money sit in a bank account for 3 months to "season", then go at it.
Answer by : Seasoned S On Date 2009-06-18 14:48:12
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