Equity Line
I have a rental house that I originally built as a 2nd home. I turned it into a rental
7 years ago. It’s a small river cabin, 800 SF and worthy about 55K. The balance is
27K at 7.75% I would like to pull some equity out for some other things. I’ve
explored refinancing but the savings would be offset by the fees, plus most
mortgage brokers don’t want the hassle of a small loan amount. I recall hearing
several months ago that some banks will do 2nd mortgage equity lines on rental
homes and/or 2nd homes. Has anyone heard of this?
There are a lot of lenders who offer 2nd mortgage or equity line for a 2nd home or rental properties. You can get it as long as you have good credit score (680-720 or more) But there is a problem here. Not many lenders want to have anything to do with log cabins. We use National City and Chase for 2nd mortgages and equity lines as preferred lenders, but I don't even know, if they lend on a log cabin. You might want to call them and ask.
Indeed, you are correct. Lender's do not want to mess with loans that small, thought you could cash and carry with a 80% LTV and put the difference in your pocket. Still a small loan, so you will get hit on the rates. An equity line is probably your best option. Call a broker, or develop a relationship with a local bank.