Financing in Virginia>Question Details

Ron Brooks, Both Buyer and Seller in Harrisonburg, VA

Home Equity on New Home (?)

Asked by Ron Brooks, Harrisonburg, VA Fri Feb 1, 2008

As an alternative to a bridge loan and a home equity loan on my current home (which I want to put on MLS ASAP), a bank loan officer has suggested that I apply for equity loan based on the house I hope to put contract on. I thought equity loans were based only on your current property. Seems like qualifiers wold be more strict. I have some concerns since I on ly have retirement income (in addition to paid off property. Does this seem good way to go since I will be able to put my home on market?T

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Stay away from that and get a new loan officer!!! That's extremely high risk in this market. It's even more risky for you because you only have retirement income that could potentially be wiped out should something go wrong.

Sell first, buy second. You can ask for a delayed settlement or a rent back from the buyers of your current property while you look for a new home if need be. Even living in a hotel for a few weeks is better than losing thousands of dollars on a scenario such as that.
Web Reference: http://www.LoudounStats.com
1 vote Thank Flag Link Fri Feb 1, 2008
You should talk with a Realtor in your market regarding how homes like yours are selling. What is the time frame it will take to get an acceptable offer. If your only income is retirement income is it enough to cover the payments on two properties until you sell your first home? I would talk to more than one bank or mortgage company to check all of the options before you sign anything.
1 vote Thank Flag Link Fri Feb 1, 2008
It sounds like there may be a particular property you want to purchase, which can sometimes prompt buyers to consider buying before selling. That is o.k. in some circumstances --- but I suggest that you consider making the purchase contract contingent upon the sale of your current home. The market varies widely in Harrisonburg right now based on the price range of home that you would be selling, which you also need to take into consideration. See the web reference below for supply/demand details . . .
Web Reference: http://tinyurl.com/2gtfzr
0 votes Thank Flag Link Fri Feb 1, 2008
Follow Danilo and Cindy's advice. Talk to a good Realtor and find a new lender who won't advise such risky maneuvers in this market.
0 votes Thank Flag Link Fri Feb 1, 2008
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