Financing in 60622>Question Details

trashcaddy, Home Buyer in 19403

Did I just shoot myself in the foot with my HELOC?

Asked by trashcaddy, 19403 Mon Nov 5, 2012

Hi,
Just bought a house in our neighborhood for cash. We're in the process of listing our current home. I'd like to go right into the newly purchased home and do some major rehab. I thought I'd pull a HELOC on day one, sell our current home, and do a cash out refi in about a year.
When I called Chase (I currently have a HELOC with them on our current address) to ask about a new HELOC they said they don't do HELOC unless it's a primary home.
My question is this: If I change my primary address to this new location. Could Chase find out and demand repayment of my current HELOC?
Thanks in advance for any thought or help you can give me..

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Mick Rothblott’s answer
The first thing you wan to keep in mind is "Don't commit loan fraud". If you tell them that this is your primary home, and sign papers to that fact, you are committing fraud if the property is nor nor will be your primary home.

In your case however, this will be your primary home. Depending upon the amount of work needed yu might have several options. Althought I might not be able to help you directly, I can point you in the right direction, Give me a call and we can discuss.
0 votes Thank Flag Link Tue Nov 13, 2012
I have found in this situation local community banks are the way to go. They can provide a bridge/construction loan - basically a HELOC with a few additional covenants - knowing that you will refi them out at the end of the project with a conforming loan.

I am currently setting up the same loan for myself with a local bank and I helped rehab a bank-owned project for a client in the North Center neighborhood. I have a good referral but I need more info about your situation.

Erik Sachs
RpV Realty and Development
Cell 773/368-5515
Email esachs@rpvinc.com
0 votes Thank Flag Link Mon Nov 12, 2012
You got some good answers below, the best advice as REaltors we can give is to sit down with different lenders/banks to see what you can or need to do to work the two properties out..... I am sure that there are some ways to figure something out that works for you as well as for the lender.
Much will depend on your finances, your income and a few other facts they will take into consideration.
But different lenders and different banks are more or less flexible you will just have to talk to several
and see what they recommend or what they can offer you.

Good Luck to you,
Sincerely yours,
Edith YourRealtor4Life & Chicago and Northern Illinois Expert

Working always in the very BEST interest of her clients, Buyers, Sellers and Investors alike....
And always with a SMILE
Covering for @Properties the city of Chicago, all N and NW suburbs, the fine homes on the
North Shore, and many of the W and SW suburbs, and with her trusted Partner Agents all of
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@Properties, 30 Green Bay Rd, Winnetka, Illinois 60093 ---- EdithDoesItRight@yahoo.com or EdithSellsHomes@gmail.com Check out my website at htttp://www.tinyurl.com/MeetEdithHere
get to know me better and learn about my experience, expertise, services available and letters of recommendation of former clients..... Also you can sign up on my site to search for properties in my expanded service area. HAVE THE MOST WONDERFUL DAY :)
0 votes Thank Flag Link Wed Nov 7, 2012
the lenders will do everything they can to ensure you get maximum opportunity
0 votes Thank Flag Link Mon Nov 5, 2012
...worst case scenario you do a Cash Out Refi on your new property at NO COST as an Investment Property. Borrow up to 75% of Purchase Price (current rates are fantastic) and if needed 6 months to a year from now refinance into another loan if it makes sense at that time.

If you are truly living (or will be soon) in the new home then you can obtain the loan as an owner occupant.

Should you have any Q's feel free to contact me:

Bill J Deligiannis
First Centennial Mortgage
630-788-5288
B.Deligiannis@GoFCM.com
0 votes Thank Flag Link Mon Nov 5, 2012
If you stay with Chase or any lender for the new HELOC you would need to provide proof you have actually moved into the new home to establish it as a primary. I do not think any lender's are doing HELOC'S on investment or second homes you will need to shop around in your area. I do not think Chase would call your existing HELOC due and payable, they just will not give you a new one until the old one is paid. Sit down with a loan officer and discuss your situation. Call US Bank they have seam to have the most flexibility and not bad pricing. Tell them up front you have two home's so you can best work out a solution.
0 votes Thank Flag Link Mon Nov 5, 2012
It sure sounds like it!
How about contacting someone other than Chase?
0 votes Thank Flag Link Mon Nov 5, 2012
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