Financing in Denver>Question Details

Andrurs, Home Buyer in Iowa

Home Equity Loan / Second Mortgage?

Asked by Andrurs, Iowa Mon Oct 31, 2011

I am looking at taking out a home equity loan or second mortgage... Currently my property (cond) is appraised at $79k, and I only owe $49k left on it (paid 20% at closing.)

With that said, I moved to CO and no longer live in the condo. I still have everything in my name and make the mortgage payment while letting my sister live in the home. I am wondering what type of appaisal is done in order to get a home equity or second mortgage?

The reason I ask is that I do not live in Iowa (where condo is located) and I don't want my sister to worry about someone else in her place for a physical appraisal.

Any thoughts? Maybe look at an online option? I'm only looking for $5-$8k in to take out.

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Help the community by answering this question:


I used to work in a banking center (physical location with personal bankers) and based on your needs, it may actually be cheaper money depending how quickly you can repay it, to just apply for a signature loan from your local bank. Credit score requirements vary by state but if you're in the 700's, you should be able to secure one with minimal upfront costs with no collateral to back the loan.

Best of luck!
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0 votes Thank Flag Link Wed Nov 2, 2011
Due to the lack of equity and the fact that you are no longer occupying the property a loan aginst your condo will not be available to my best knowledge. I would suggest going a your local bank for an unsecured line of credit. Rates are a little higher but depending on how long you need the money that may be your best option.

Try Security Service Credit Union
Vectra Bank
or You local bank or credit union.
0 votes Thank Flag Link Wed Nov 2, 2011
Here is the hard truth. I agree that a line of credit on a property that is not your primary residence is a tough call in this environment
My suggestion is to change your spending habits, using Real Estate as An ATM machine is part of what has gotten so many people in financial problems.
One more suggestion is to generate some income with that property and apply it towards the credit card debt.
Good Luck
Kevin Connolly
Verde Denver Real Estate&Property Management
0 votes Thank Flag Link Mon Oct 31, 2011
2nd mortgages usually cap out at 80% LTV like Robert pointed out. There are a few I am aware of that go to 85% & 90%, but the majority stick to the 80% cap these days. When property values start increasing we'll probably see that level increased to 90%.

However a 2nd mortgage was always a difficult loan program to find for non-owner occupied properties (which is what your condo is), even when credit was at it's easiest there were only about half a dozen or so lenders willing to lend 2nd mortgages on non-owner occupied. They also required excellent credit (720-740 credit scores) as well as some reserves in the bank (checking, savings).

Given that your scores are near 600 (I read in another post) and the credit environment today, I don't think a 2nd mortgages on your non-owner occupied condo is going to happen.

I saw the issue is that you need $5-7k to pay off a credit card. Usually on a home equity loan/line of credit lenders are looking for a minimum of a $10-15k loan amount, $5-7k is just too small for most. Is paying off the credit card to improve your scores? To get a better interest rate? One idea it to take out a small personal loan (which reports as an installment loan, therefore not hurting your utilization), pay off the revolving credit card, which would increase your scores, and then you could apply for better interest rate credit cards or better interest rate personal loan. I did the same thing with my credit cards, was able to increase my scores dramatically at that point, and then I refinanced my debt with my new higher credit scores. I was fortunate enough to qualify for a personal loan from a credit card holder, if your scores aren't able to, you may want to look into peer-to-peer lending sites such as
0 votes Thank Flag Link Mon Oct 31, 2011

Local banks or credit unions either here or in Iowa may be your best options to consider. Also many banks want to have 20% equity in the home after they refinance. Banks today seem to be very reluctant to do 'cash-out' refinances due to the new bank rules and tight guidelines. Do your research and decide what will work best for you. All the best in accomplishing your goals.

Robert McGuire ASR
Your Castel Real Estate
0 votes Thank Flag Link Mon Oct 31, 2011
Your local credit union or bank is a good start to getting a home equity line of credit. Most of the time the appraisal they order is mostly a drive by and they don't come into the property. However, with that said, the online companies should be your second stop if the local banks and CU want to do a full appraisal with entrance to the property. Ask questions up front before you decided. If you need further guidence, please email me directly if you wish.
0 votes Thank Flag Link Mon Oct 31, 2011
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