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can i use my equity loan to by an other residence and rent the existing one?

jenkin7 · Posted: Mon Dec 07, 2009 11:50 pm Post subject:

Hi evamerr,

You can use the home equity loan to buy another house. One of the advantages of using home equity loan is the interest you pay on the loan is tax deductible. However, your should make sure the rental income offsets the closing and other costs associated with the equity loan or you must have other sources of income to afford the new home until it is paid off.

marklavender1 · Joined: 13 Sep 2009 Posts: 120 -0.14 Dollars($)

hi evamerr,

You can use a home equity loan for almost anything. you can use this for purchasing or refinancing a home and purchasing land also.

riseabove · Joined: 09 Nov 2009 Posts: 277 11.01 Dollars($)

Equity loans are very handy, largely because of their flexibility. Depending on your equity, the best option for you is probably only to get an equity loan for as much of a deposit as you need to get a loan for the new property. This is because equity loans can be at a higher rate than a standard mortgage as they are classed as a second mortgage, therefore you only want to borrow as little as possible on an equity loan to keep your interest down.

That said, if you're going to be renting one of these properties out, there would probably be tax advantages involved in having as much of the debt as possibel secured against the rental property, in which case a full cash out refinance might be a better option.

You can get fast, no obligation quotes from multiple lenders for both an Equity Loan and a Refinance at one of the sites in my sig if your insterested. I'd definitely recommend shopping around - not all lenders are created equal.

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