If I purchase a home for $300,000, but it is appraised for $350,000, will I have automatic built-in equity that I can use to consolidate $12,000 in school loans and credit card debt? Or, will I still have to pay down some of the P&I in my mortgage before I can use the home equity? That is the situation I find myself in right now. Thank you!
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March 8th, 2010 at 12:51 am
First off, you should NEVER NEVER NEVER attach non secured debts to a secured debt.
Don’t do what you are contemplating, even IF they were to let you.
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March 8th, 2010 at 1:36 am
Many lenders will require that you have at least 20% equity in the home (you do NOT have that yet) and will require that you have the mortgage for a set amount of time.
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March 8th, 2010 at 1:57 am
Great advice here so far. It is not a good idea to borrow against your home for unsecured debt.
If you have the disposable income to afford a $300,000 house, you have the smarts to just worh hard to pay down credit card debt and school loans with extra principal payments.
Many people in the past borrowed against their homes to pay of credit card debt, then when they could not afford the mortgage payment, they lost their home. Not such a great plan.
Stop using the credit cards, pay down debt, then buy house. Besides 100% CLTV loans are gone for now.
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March 8th, 2010 at 2:42 am
I have to agree with the first answer, you should never attach non secured debts to a secured debt. The risks are too high. You have to clear yourself from all debt. Go easy on the credit card, learn to cut your credit card debt http://basscash.blogspot.com/2010/03/how-to-cut-credit-card-debt.html. If your still insecure of your decision contact your bank, i’m sure they will be able to advise you in this matter.
References :
http://basscash.blogspot.com/2010/03/how-to-cut-credit-card-debt.html
March 8th, 2010 at 3:17 am
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References :