Currently, I'm being told I need 20-25% down to buy a home for investment purposes. That's fine. It used to
be you could use the equity of a home( say i bought a 100k home for 50k) has colletrtall for a second or 3rd or 4th home. is this still true?
Answers (3)
You can use an equity line for the down payment, but they are not easy to get above 80% LTV.
Web Reference: http://socalfhahomeloans.com
When you purchase a home for $50K, then you need to put down 20%-25% of the $50k. Now, you can refinance that loan later and have it appraised at its retail value at that point in time. Depending on the value, you can use the equity to replenish the cash that you took to put as a down payment.
FIRST ANSWER
There is no such thing as buying a home "worth" 100k for 50k....
IF YOU BUY IT FOR 50K, THAT'S WHAT ITS WORTH.
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