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garg · Joined: 07 Jul 2009 Posts: 1 1.38 Dollars($)

Hello,

I have a single family home with a mortgage of $385,000 on a 30 year fixed. The home was purchased by me for $617,000 in 2006. I am looking to take a HELOC for $95,000 to purchase a rental property. The county tax assesed value on my home is $599,000, I'm located in King County, Kirkland, WA.

The problem I'm facing is that the appraisals for my property are coming in low. $515K to $530K. Looking for advice on lenders that use higher appraisal amounts or offer higher LTVs?

Thanks!

adonis · Posted: Wed Jul 08, 2009 12:25 am Post subject:

Hi garg,

As the appraised value of the property is lower than the mortgage you have on it, lenders will not be ready to give you a HELOC. This is because, you do not have equity in the property. You'll have to apply for a separate loan for your rental property.

elnoralittle · Posted: Wed Jul 08, 2009 4:51 am Post subject:

I see with the appraised value of 530k you have almost a 90% ltv...maybe a little over.
If you don't go over, and you go to the 90% you might be able to find a lender. I know that Chase still offers helocs, however, you might want to contact your current mortgage company to see what they can offer.
If you want the rental, you might have to fully refinance your home and take out mortgage insurance.
It is hard to pull equity in excess of 90%ltv. But I don't think it's impossible.
Please be careful though. Your home, is your home...and investment property might be more burden than you would like. If you are an experienced investor, then I am sure you know all it entails. But if not, maybe talk to someone who has done it before and get the jists of it before you pull equity from your own home to purchase.
Good Luck.

gmakerley · Posted: Sat Jul 11, 2009 5:25 am Post subject:

i'm in agreement with elnora that you may be able to find a lender who'll grant the loan, despite a high ltv. it's a question worth asking of your current lender as well as any of the lenders in your area. home equity lines carry reduced rates these days due to the fact that prime rate is quite low (3.25%).

as elnora also pointed out, your skills as an investor had better be sharp, because there is inherent risk in owning investment property. be prepared for the worst.

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