Bad idea to get a home equity loan out of a rental and use it for a down payment?
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Anonymous
| Is it even possible? The oldest rental has 70k in equity. |
Anonymous
|
Not a bad idea, just hard to do. The lender will want to be satisfied with the rental history and will require a higher LTV ratio than it would on a primary residence. Worth a shot though. |
Anonymous
| doing this b/c you don't have down payment or to avoid PMI? |
Anonymous
| We did something similar. In our case it was a very bad idea. The value of the rental dropped and we were deeply underwater. Banks were closing or calling HELOCs at that time too. |
Anonymous
| OP here. This would be to buy a property in "cash" with the additional money we could get something. |
Anonymous
| It's mortgage fraud. |
Anonymous
| Didn't know that. |
Anonymous
| Real estate attorney with a portfolio of several dozen properties (condos Mimi family retail office storage units notes etc). Definitely legal to do. Try td bank. They have the best rates if not owned in an llc. You referenced a equity loan but a pp referenced a heloc. Since the money is being taken for the long term id go with the equity loan (unless you can pay it back within 5 years from rental income). And of course you should only do this if each property stands on its own. |