Moving in 19518>Question Details

Laney, Home Owner in Pennsylvania

We own our home...would it be advisable to get a Home Equity Loan to buy another home?

Asked by Laney, Pennsylvania Sun Apr 3, 2011

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Hello Laney,

That is a very good question you are asking. Without all the facts/details, it is not a simple answer. I would be glad to discuss with you in private. Feel free to contact me at 610-802-0891. Look forward to hearing from yo!!
0 votes Thank Flag Link Sun Apr 3, 2011

I assume you're talking about purchasing another primary residence, not a second home while keeping possession of your current house....

To begin with, unless you have no mortgage currently on your house, it would be extremely difficult to obtain a mortgage to purchase a house while you still have a lien on your current property.

If you do have a mortgage on your current house, BEFORE YOU DO ANYTHING, have a real estate agent come over to your house and do a CMA or comparative market analysis to see what your house could be sold for in today's real estate market. Taht way, you can crunch numbers, find out how much equity you actually possess in your current house, and how that translates into purchasing another house. THEN, get your house on the market and if possible get a contract on it so that you can start seriously looking for a new house with confidence that you can actually go to settlement on it. (Many sellers put their house on the market and then start looking, without getting a contract on their current house, so any offer has to be contingent on their obtaining a sale on their property - and often these contracts fall through because the house doesn't sell within the necessary time frame).

If you don't have any liens on your current house (i.e. own it free and clear of any mortgage), then you could talk to your bank about obtaining a "Bridge Loan", which is a loan product designed to help a homeowner purchase their next home using the equity in their current house, which they then sell in order to pay off the Bridge Loan. But honestly - in this economic climate, they're difficult products to obtain because the real estate market is so dicey that often houses don't sell for what people think they will.

You need information on how much your current house is truly worth in the marketplace - talk to a real estate agent. If you want more information on a CMA, please feel free to call me at 610-207-0172 and I can give you more information on it.
0 votes Thank Flag Link Sun Apr 3, 2011
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