Determining home equity loan value

[Kavenwire]

I ran into a similar thing a while back—talked to my bank and they only looked at the most recent appraisal too, not the county value. I ended up chatting with someone from fast property finance Staffordshire and they gave me some ballpark figures based on nearby sales, which helped me figure out what I could actually borrow before spending money on an official appraisal.

 

[MossRoad]

To be clear, are you talking about a home equity loan, or a home equity line of credit?

 

[EscapedSuburbia]

I still think your simplest solution is to 1. find what you want. 2. Buy it. 3. Get a mortgage on it. 4. Go prep and sell the old place. 5. When it closes, pay off the mortgage with the proceeds.

This is what we did earlier this year.

Selling your house first then buying another may be the best financial decision since it avoids paying interest but it's pretty impractical. It took us over a year to find our current property. If we'd have sold our house first we would have needed to store all our stuff and pay rent for over a year. Plus even after we moved to our new place it took a couple months to prep the old place for sale - paint, carpets, small repairs all take time and are hard to do properly when all your stuff is in the house.

Just get a conventional mortgage, buy your new place, sell the old place and pay off the mortgage.

 

[stucknutz]

This is what we did earlier this year.

Selling your house first then buying another may be the best financial decision since it avoids paying interest but it's pretty impractical. It took us over a year to find our current property. If we'd have sold our house first we would have needed to store all our stuff and pay rent for over a year. Plus even after we moved to our new place it took a couple months to prep the old place for sale - paint, carpets, small repairs all take time and are hard to do properly when all your stuff is in the house.

Just get a conventional mortgage, buy your new place, sell the old place and pay off the mortgage.

Couldn't agree more. This is what needs to be done!

 

[quicksandfarmer]

Honestly, after thinking about it, I think you're right.

What I'm kind of surprised at and honestly a little irritated with is why the CU didn't steer us in that direction when we told them our plans.

Wife hasn't been home in a couple of weeks due to a surgery her mom had, but coming home tomorrow (along with mom) and we can talk about it more in person.

Don't you know when you're from upstate NY, you're from the Catskills?

When you go to a muffler shop, you're going to get a muffler.

If you call the bank and ask about home equity lines, you're going to get passed to someone who sells home equity lines.

As others have said, buy the house with a conventional first mortgage, primary residence. That gets you the best rate. Then sell your existing house. If you need money for the down payment on the new house or to fix up the old house for sale, use a home equity line for that.

 

[ultrarunner]

Bridge loans serve a purpose and not all that unusual but often are private money and not institutional.

Typical is you find the perfect property and realize act now or loose it but you also need to sell the current home.

My brother has 4-5 of these in a year and not once an issues other than bridge loans come at a price but for short term can be well worth it.

Don’t overlook the possibility of seller financing… I’ve bought a few this way… some just needed work and two were sellers retiring and looking for income stream better than CD rates.

 

[Sigarms]

To be clear, are you talking about a home equity loan, or a home equity line of credit?

Home equity line of credit.

Wife also fell in love with an older place (built in the early 60's). Single level, 1,650 sq ft with an unfinished basement. Came with close to 4 acres, and we're going to be having a lot of work done on it.

The price was right, and figuring on what we need to sink into the new place, it can be done. Game plan is move in January / Feb, do some upgrades on the current home (due to the appraised value just so it doesn't look like we lived in it for 20 years lol) and put it on the market. Our current home is kind of unique to the area with house size and land, so time will tell.

I wasn't as enthused as my wife about the "new" home, but she has always had a better vision than myself when it comes to the future, and the more I go over there (about 20 minutes away from our current home, but in the same county) the more it's growing on me and I'm starting to see what she is seeing on what it can become.

 

[riptides]

...

I wasn't as enthused as my wife about the "new" home, but she has always had a better vision than myself when it comes to the future, and the more I go over there (about 20 minutes away from our current home, but in the same county) the more it's growing on me and I'm starting to see what she is seeing on what it can become.

yeah, my wife had vision. All I saw was work. We joke to this day what we said to each other when I first set foot on our place. Our real estate friend refused to show the place to me.

All turned out really well. I am sure your new place has potential for the same.

 

[Sigarms]

yeah, my wife had vision. All I saw was work. We joke to this day what we said to each other when I first set foot on our place. Our real estate friend refused to show the place to me.

All turned out really well. I am sure your new place has potential for the same.

After we signed for the new place, I wasn't getting much sleep at night because I was worried what could go wrong LOL

My wife said something to me which is one reason why I married her... Long story short, she brought God into the equation which I didn't. I get it, if you don't believe in God, I could be a fool, but the reality is financially we can afford what we're doing, but we are incurring debt doing it, and I HATE debt. However, no different than when we bought this place 20 years ago with the stress of debt, and in reality we are in a better position now vs 20 years ago since this house is the only thing we are in debt on, but that debt should be gone in the first quarter of next year after we sell our current home.

It's going to be nice in a much smaller home along with an unfinished basement for storage for just the two of us. With just us.

I think the house we bought would have been perfect 20 years ago, but the reality is our current home worked out perfect with the boys and my dad living with us along with all of our animals and pets over the years and this new house could never accomplish that.

 

[ericm979]

It's great that you found a place that you like! The debt part is scary but hopefully it'll be over relatively soon.