Credit Lines
I want some info on getting a credit line through a bank. I have a property that I own outright and would like to get a credit line to buy more properties. Could someone shed some light on the pro and cons of this. I would rather do this than get a mortgage.
Look at it this way, if you cashed out 100% of the value of your home, the interest rate would be around 8%. If you pulled out half the value of your home it would be around 5.6%. Can you find a line of credit for that amount of money with better terms?
[addsig]
I get what your saying, I was looking at it as far as, you only have to pay on what is used at that time, so if I can get a credit line for 100% and rent it out, then that is all cashflow, unit use the credit line. Plus if it is a secure credit line then I will have to make payments.
I am looking to pick up a few houses consectutively and need a very liquid option to do so
Also, you may want to consider a home equity loan rather than a line (HELOC), since you can lock in the rate of the loan. My lines are up around 6.5-7% now (even on 65% LTVs) and rising. The home equity fixed loan option would make sense if you plan on using all or most of the money within a short period of time.
That is a good Idea.
My goal is to purchase, fix rent and buy the next one. I am looking to buy, fix and rent and not take out the full value on any of the properties. I have donse some rehabs and flips but I am positioning for the long term. How does this stragegy sound? What should I watch out for?
Some banks offer the best of both worlds, Line with option to lock into a loan.
This means you can carry a 100K line and when you put 25K down on a home, lock it into a loan at a fixed rate of the going time.
Next month you spend 15K to fix it up, using it as you go with the contract, then lock again.
The bank i know that offers the product is US bank, but im sure others do too. Try there website www.usbank.com
I just bought a house cash and have a HOLC on this home.
In my research for a bank, I went to several banks. I found the small bank was the best for me. Received my HOLC without any cost at all, no apprasial fee! Yeah..
Also, they gave me a 25.00 AMX gift certificate for opening the line with them
Therefore, my advice is look at all the banks in your area and ask what are the fees for investment props.
You will find a local banker who wants your business and will bend over backward to gain your trust.
Hope this helps.
Thanks for the info,
I applied for the HELOC today and I am anxious to see what they say. I have several that I want a line on then I can purchase more faster. The market that I am in is getting busy and the vultures are coming or they are already there but I am not angry but the ones I need, the word cash on the spot is very powerfull!
The local bank thing is true I have one bank that is offering basically what HML is offering but for very less and much much less paperwork and it goes right into perm when im done. which is even better!
Can you give me an idea of the credit score it took for these banks to consider giving this type of deal?
I have took some major hits on my credit lately including adding a new unsecured loan due to purchasing a business off someone and some real estate deals as well. The last I checked my fico is in the 615 area. But it was a lot better a few weeks ago! Damit! I am mad because it did not get the HELOC from the one bank I tried. Does anyone know of a place to get a HELOC fast? with a score like mine?