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Using Equity to Purchase New Home

Discussion in 'General' started by redtailracing, Sep 1, 2024.

  1. redtailracing

    redtailracing gone tuna fishin'

    Looking to buy a new house and need the equity out of our current house to do so. Let’s say for the sake of easy math that we currently own a $300k home with $150k in equity. Looking to purchase a home at $600k but would need the $150k in equity to do so.

    Would like to avoid contingency offers as sellers hate that. She has a government job with a retirement plan that can’t be borrowed against and I don’t have quite enough in my own to borrow that much.

    A little research shows that a HELOC, home equity loan, or bridge loan may be an option but navigating the differences feels a bit overwhelming and it appears some mortgage lenders may have stipulations against using these. I suppose that would be something we’d find out as part of the prequalification process.

    Worst case I suppose a month to month lease and a storage unit could bring the gap but this feels far more cumbersome and expensive.

    What sayeth the beeb? What methods have you used or would you use nowadays in this situation?
     
  2. njracer

    njracer Well-Known Member

    Are you selling or keeping the current home?
     
  3. redtailracing

    redtailracing gone tuna fishin'

    Selling.
     
  4. Alex_V

    Alex_V Dump the diesel

    New house - as in "New to you", or "brand New"? Builders will be fine putting a contract on a NEW home that is being build that is contingent on the sale of your current home. Happens all the time.
     
  5. HPPT

    HPPT !!!

    Don't confuse @motion now.
     
    motion likes this.
  6. Pneumatico Delle Vittorie

    Pneumatico Delle Vittorie Retired "Tire" Guy

    Asking for money advise on the beeb is like betting that El Diablo will win a dry MotoGP this year.

    So ask around to your LOCAL buddies for a freebie with their financial advisor. After all your friend's REAL finance guy wants to keep your friend and maybe gain you later as a client?
    Research is needed but not on the beeb, ok?
     
  7. YamahaRick

    YamahaRick Yamaha Two Stroke Czar

    So instead of asking for opinions (that the OP can ignore) from a group of folks that have no vested interest in the question, you suggest going to folks that earn commissions on the type of product he is looking for?

    Yeah right.

    I take it you ~always~ take your vehicles to the nearest authorized dealer for all of the service work needed, as they are always your best choice of providers.

    Sorry dude, but IMO your suggestion was a doozy.
     
    Wheel Bearing, 418 and dave3593 like this.
  8. StaccatoFan

    StaccatoFan Our National Nightmare is over

    My ex and I took out a “Bridge Loan” to buy a house in 2006 against her house. It never sold. We are still paying on it.

    So my two cents.

    DO NOT FUCKING DO THIS!!!!!

    Last month 16 percent of home buyers ripped up their home contracts and walked away. They’re biggest reasons were reasons we cannot discuss here. There concerns about things coming was noted as a prominent concern.

    You could be stuck and fucked with your house you have now, the HELOC, and your new house payments all at once.

    Oh and the HELOC and new house would be at like 7 percent.

    Double fuck that!!!
     
    Sweatypants, R Acree and YamahaRick like this.
  9. YamahaRick

    YamahaRick Yamaha Two Stroke Czar

    Oh, and my suggestion to the OP? Wait a bit, that $600K home will be $300K before you know it. But your current $300K home will only be worth $150K. And unless you can survive on your spouse's income alone (less likely to be laid off), don't do anything this huge regarding your finances.
     
    27, R Acree, brex and 1 other person like this.
  10. Razr

    Razr Well-Known Member

    ^^THIS^^ This will be one of the first questions a builder will ask you, it's pretty typical for a builder. Put your home for sale sooner than later.
     
  11. StaccatoFan

    StaccatoFan Our National Nightmare is over

    I refinanced my house as part of the divorce to get her name off of the house about 5 years ago. Last Summer the guy that did my mortgage called me asking me if I wanted to leverage equity out of my home.

    1) that tells me how bad things are. When a lender CALLS YOU to offer loan services, shits bad.

    2) I laughed hysterically and told him no fucking way. And hung up.
     
    BigBird and YamahaRick like this.
  12. ChemGuy

    ChemGuy Harden The F%@# Up!

    Sell your house.
    Pack up 95% of your 'stuff', store it.
    Move out into some cheap place.
    Look for new house. Realize you dont need 95% opf the 05% of stuff you stored. Get rid of 75% of it.
    Buy new house based on having less stuff.
    Be happy.
     
  13. StaccatoFan

    StaccatoFan Our National Nightmare is over

    Chem Guy is right.

    if you’re going to make this move at one of the worst possible times, make sure house 1 has somone else’s name on it before you put your name on house 2.

    By the way. Another mistake you’ve made is considering this plan now in Sept. you want to put your house for sale in March/April. People move after school lets out and get settled before the new school year begins.
     
    BigBird likes this.
  14. Alex_V

    Alex_V Dump the diesel

    For the most part this is correct. Your average 'burban home is best to be put on the market in Spring, for the reasons above. There are few exceptions to this rule, based on your market, location and type of property. But in general - Spring is best time to list, and winter to buy.
     
    BigBird likes this.
  15. nigel smith

    nigel smith Well-Known Member

    As others have said, borrowing money against the hypothetical sale of your current home is simply asking for financial distress. You're an engineer. You already know this. May I ask why you want to move now? Prices are high, as are interest rates. I would advise waiting at least until the incoming president gets past fixing the country on day one.
     
    05Yamabomber and YamahaRick like this.
  16. TurboBlew

    TurboBlew EeVee range testor and subsidy recipient

    how is the rental market in your area? How ready is your current house for sale?
     
  17. zamboiv

    zamboiv Well-Known Member

    Is the house already on the market or is this hypothetical? Are you in an area where your current house will sell quickly? Within a few months?

    I never like putting a sell contingency on my houses when buying and I never use a buying agent, I want at the front of line if im not paying cash, so I use the selling agent to work both sides.

    If your current house will sell fast open a HELOC but also make sure you’ll qualify for then new home with the max draw on HELOC. Don’t want to get declined on new home loan cause your debt to income will be too high.

    last thing on HELOC, they won’t let you take your current home to 100% ltv. They’ll likely stop you out at 70-75% depending upon bank. Mine will go higher but I’ve got other things wrapped in it to allow it so they know there are assets backing it.

    Feel free to dm me if you want. I’ve done some pretty complicated stuff and everything from full cash “As-is” to contingency to sell and in between.
     
  18. YamahaRick

    YamahaRick Yamaha Two Stroke Czar

    Make your choices financially logical ones. Throw out any emotions influencing the goal.

    I don't care if the $600K house is "the one." There will be others. There will always be others that qualify as being "the one."
     
    Murcielago311 likes this.
  19. ChemGuy

    ChemGuy Harden The F%@# Up!

    We still talkin houses or .....


    :D
     
    Wheel Bearing, YamahaRick and brex like this.
  20. Pneumatico Delle Vittorie

    Pneumatico Delle Vittorie Retired "Tire" Guy

    Huh no you missed it?
    Point was keep your business to you and out of the beeb. And really you wouldn't want to get input from a non vested financial peep to help you look at all of your options?
    In other words study the data, consult experts, understand your options, THEN make a choice
     

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