Posted on: 19th Jan, 2010 12:54 am
Hi,
I need 280K to pay off my existing mortgage of 30K and use the left over as a down payment on a new home. The old home will be my investment property so i'm not sure what type of loan do i need to take out. The home is estimated at 390K and has a balance of 30K left on the mortgage. It is a 30yrs fixed at 4.75%.
Thanks i advance!
I need 280K to pay off my existing mortgage of 30K and use the left over as a down payment on a new home. The old home will be my investment property so i'm not sure what type of loan do i need to take out. The home is estimated at 390K and has a balance of 30K left on the mortgage. It is a 30yrs fixed at 4.75%.
Thanks i advance!
hi tonethai,
if the home is currently worth $390k, you can get a loan of $280k using the equity in the property as collateral. you can do cash out refinance and tap the equity in the property. you can also go for a home equity loan. however, the money left over after paying the existing mortgage cannot be used as down payment on the new home. the down payment you make has to come from your own funds or from gifted funds. using borrowed money as down payment is not allowed. if you cannot arrange for the down payment, your relatives or friends can gift you the down payment money.
if the home is currently worth $390k, you can get a loan of $280k using the equity in the property as collateral. you can do cash out refinance and tap the equity in the property. you can also go for a home equity loan. however, the money left over after paying the existing mortgage cannot be used as down payment on the new home. the down payment you make has to come from your own funds or from gifted funds. using borrowed money as down payment is not allowed. if you cannot arrange for the down payment, your relatives or friends can gift you the down payment money.
You need to be sure that you can qualify for both loans though. If you are self employed, then you can get a stated income loan.
Jenkin7... I don't understand why i can't use the money as a down payment? If i borrow 280K and pay off the existing loan of 30K, i have left 250K to down on a home. Wouldn't the bank love that bc that's 50% im putting down. I see it as win win situation for both banks if something were to happen like i can't come up with my payments and both banks could seize and sell the properties.
eric1....i've talked to a loan officer and he said if i'm putting 50% down i should not have a problem
eric1....i've talked to a loan officer and he said if i'm putting 50% down i should not have a problem
Hi Guest!
Welcome to forums!
As far as I know, you won't be able to use the left over 250k as a down payment on the mortgage because the obligation to pay off that amount to some other lender still remains. The lender will verify the source of the down payment while giving you the loan. Thus, he won't allow you to use that amount as a down payment.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
As far as I know, you won't be able to use the left over 250k as a down payment on the mortgage because the obligation to pay off that amount to some other lender still remains. The lender will verify the source of the down payment while giving you the loan. Thus, he won't allow you to use that amount as a down payment.
Feel free to ask if you've further queries.
Sussane
Hi Sussane and thank you!
I'm new to this so please take me lightly haha
Ok are you saying lender A who i'm going to do a cash out refinance will not allowed me to use that money as down payment on a home or the lender B will not accept that money as down payment? Or because lender B run my credit and sees that i have a mortgage balanced of 250K from lender A?
I'm new to this so please take me lightly haha
Ok are you saying lender A who i'm going to do a cash out refinance will not allowed me to use that money as down payment on a home or the lender B will not accept that money as down payment? Or because lender B run my credit and sees that i have a mortgage balanced of 250K from lender A?
The lender B will find that you have an obligation to payback $250K which you use as a down payment. As a result he may not accept that amount. You should not have the obligation to pay off the amount that you use as down payment.