Financing in Texas>Question Details

Ozzy Harriet, Home Seller in Texas

I live in Texas. I have about $500K in equity in my home. The house has been for sale for 6 mos and is not

Asked by Ozzy Harriet, Texas Sat Dec 13, 2008

budging even tho I've dropped the price twice. Can I get a HELOC or other equity based loan while the house is for sale? Does it matter whether this is my primary or secondary residence?

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Help the community by answering this question:


Here's a different perspective, one you may not want to hear.

You probably don't have $500,000 equity in your home.

Example: Let's say you owe $100,000 on the home and you're assuming it's worth about $600,000. There's that $500,000 equity. Presumably, it's listed for sale at $600,000. (Wouldn't make any sense to list it for more than you think it's worth.)

However, the house isn't selling. That means only one thing: It's not worth $600,000. Not in today's market, in your location. If it were, it would sell.

Maybe it'd sell for $550,000. And that would mean you'd have $450,000 in equity in the property, rather than $500,000. Not too bad. However, maybe it'd only sell for $500,000. Now your equity is down to $400,000. Or maybe it'd only sell for $450,000. Now your equity is down to $350,000. That's still a lot of equity, but not what you'd be expecting.

But that's really the bottom line. Equity is the difference between what you owe and what it's worth. And if it's not selling at a price (even a lowered price), then it's not worth that amount. It's worth whatever it'd sell for, and no more.

And if you try to get an equity-based loan for your property, the first thing the appraiser will do is, umm, appraise the property. And by looking at recent sales and listings (including yours), the value likely will be set lower than what you've unsuccessfully been offering your home at.
1 vote Thank Flag Link Wed May 27, 2009
Don Tepper, Real Estate Pro in Burke, VA
Normally, HELOC are reserved for homeowners who are planning to stay in their homes. As long as it is offered for sale most banks will not issue a HELOC against the property.

Residency is often not normally a factor in lending for second homes. If you have sufficient income, you may want to consider re-financing with cash out as an alternative. However, be forewarned: many lenders are not doing well and are skittish about making loans. They have tightened up the rules considerably. The fact that you offered it for sale will go into the appraiser's evaluation of the value of the house.

Between Thanksgiving and New Year's the market around DFW is exceedingly slow. Sales don't stop altogether, but they are much slower due to the family events around the holidays.

In order to get a more effective evaluation of your situation, the specific market your home is in will be needed. Which city and neighborhood is the home located in? What are the characteristics and features of the property, e.g. bedrooms, size, amenities?
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1 vote Thank Flag Link Sat Dec 13, 2008
There are many things to consider when selling:

1. How is it being marketed ? Where is the listing agent marketing your property - is it just on MLS or is he/she using other Realtors all over the world to promote on their MLS system worldwide. ( FACT: most Realtors do not know that you can co-broker other realtors listings and put them in MLS )

2. Is it on ? If so - how many pictures show the home ? will allow up to 25 pictures, a Virtual Tour, A Streaming Video and much more.

3. Has the Realtor done an open house ?

4. Has the Realtor done a Realtor Lunch inviting other Realtors ?

Consider these questions - good luck with your sale!
0 votes Thank Flag Link Wed May 27, 2009
I am a Dallas real estate agent and Dallas home loan officer, difficult to state unless your entire file is reviewed. HELOC loans are "thing of past" not many lenders if any offer those loans any longer. Lenders currently are "shying away" on 2nd homes fact they are 1st return as foreclosure than a primary residence.

Refinance depends on credit score, debt ratio, employment history, and etc.

$500K equity home safely assume your home is luxury jumbo loans lenders have "tighten the belt" on buyers.

Contact my office where I can review more of your file
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0 votes Thank Flag Link Sat Dec 13, 2008
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