Mortgage home loan answers
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Can I use an equity loan as first mortgage?
Posted on January 31st, 2011 3 comments
EDlbh asked:
I’m looking at being able to put a cash payment for 75% of a house. I really don’t want to go through all the expenses of a mortgage when I probably will be paying it off in 3 months. I was wondering if I could do a home equity loan on the property from the git go and avoid all the mortgage costs. Is this allowed? Any other suggestions?
Louis3 responses to “Can I use an equity loan as first mortgage?”
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No, dear, because you can’t get a home equity loan on property you don’t already own. Equity is the difference between the current value of the property and how much you owe. But if you don’t own the place, you have no equity.
No lender will give you a loan without title insurance, and appraisal of some sort, etc. I don’t know if it’s still available, but Bank of America had a no closing costs purchase loan recently. You might try them.
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senna4487 February 1st, 2011 at 12:41
As a previous poster mentioned, you can;t get an equity loan until you have equity in the property- and if you don’t yet own the property… well I’m sure you get it.
If you have the other 25% – why not buy the house in cash- and then get an equity loan after you’ve closed.
Getting an equity loan will be a snap with that percentage of equity- even in this economy. While there are very few lenders that allow no income or asset verification loans anymore, a loan with a Loan to Value of 25% is probably one of them.
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To add to what others have says, most lenders will not do a home equity loan if you haven’t owned the property for at least 12 months. The request a chain of title. As far as mortgage cost goes, the same cost is involved in a home equity mortgage as it is regular, closing cost, fees, etc. The only thing different is the type of loan which comes with more stipulations and requirements.
Good luck!
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daeve930 January 31st, 2011 at 06:07