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HELOC on Rental Property

Posted on: 02nd Dec, 2008 12:00 pm
Are there any lenders out there today offering HELOC's on single family rental homes, and who are they?
Hi Jim,

As far as I know, it is possible to get a home equity line of credit (HELOC) on a property that is non-owner occupied. Most of the lenders will require you to maintain at least 20% equity in the property. Moreover, the lenders will request for qualifying documentation from the borrower which may be higher than that of owner occupied loans.

You can check out with the local lenders of your area if they are ready to offer such loans to you. This community also has a large number of lenders whom you can consult and get a no-obligation free mortgage quote.

Posted on: 02nd Dec, 2008 08:37 pm
jim, virtually all mortgage lenders have stopped offering home equity loans. you may find that credit unions and/or local, community-type banking institutions will continue to offer them - in my area, at least, i believe that most do, in fact.

to obtain a home equity loan on non-owner occupied property is actually rather contradictory: the word "home" delineates a property that is occupied by an owner. i've not encountered a lender who would offer such a loan on investment property over the years.

i don't say that to dissuade you from making the effort, but i would suggest that you not be disappointed if you find that you're unable to obtain one. it's just not the norm.
Posted on: 04th Dec, 2008 07:39 am
Posted on: 21st Apr, 2009 07:33 am
Hi dgmcpa,

You can check out with your current lender to see if he can offer you HELOC or not. You can also speak to the lenders of this community and seek a no-obligation free mortgage consultation from them. This will help you in knowing whether you will get a HELOC or not.

Posted on: 27th Apr, 2009 01:54 am
Posted on: 10th Aug, 2010 02:10 pm
Hi scott,

If the property is free and clear and if you've the required credit score and income, then lenders will be ready to give you a loan. You can contact the local lenders and apply for a loan. You can also seek a no obligation free mortgage quote (check out James Hogg's post above for the link) from the lenders participating in this community and get to know what type of rates and terms you would qualify for.

Take care.
Posted on: 11th Aug, 2010 02:54 am
Looking for a LINE OF CREDIT on a rental property that I own with no mortgage. Not looking to refinace with NO points, closing costs, or application fee's. I have great credit. Anyone know of any lenders?
Posted on: 12th Aug, 2010 08:04 am
Hi scott,

You can refer to Sara's post above. She had replied to your query and given suggestions regarding getting a line of credit on a rental property.
Posted on: 13th Aug, 2010 01:11 am
Scott, I am of the opinion that it's not easy to obtain a home equity line of credit on a non-owner occupied property. First of all, it is a "home" equity line you're looking for, and a home is defined as a personal residence by virtually every lender. That's not to say that there aren't lenders who look at things differently, but I suspect most don't.

The big issue with a heloc in this market is, of course, that fewer and fewer lenders are in that marketplace. The risk involved, and the lack of equity that so many people are suffering with is a large part of that problem.

As you said, you have a house that's free and clear of liens, and that might just persuade someone to lend to you. I can't offer you much assistance with names, etc. of any lenders, but would have to opine that you'll need to shop around - locally for yourself or for the property; or online.
Posted on: 16th Aug, 2010 04:18 pm
Many banks WILL do a HELOC (even now) also credit unions will also do them you just have to do some calling.

Bank of the west, Wells Fargo, Bank of America, plus Many local credit unions do, loan brokers will all also find you money (if there are smart)

A first mortgage is a BAD idea on a property you already own. Why would you pay $2-5000 bucks or more in closing cost plus an Obama appraisal for $3-500 bucks? The interest rate is worse and its a higher payment per month. Investment properties need low monthly payments to keep ones DTI low. The rate is not so important. Stupid fees are.

This may lower your credit score, its revolving debt not installment (ie home loan)

Do some research, many banks told me that no one is doing these loans any more but that is not true

Best of luck
Posted on: 01st Sep, 2010 05:36 pm
charles, i'm sure you're right about "many" banks granting home equity loans. keep in mind, however, that the premise behind a "home" equity loan is that it is someone's "home," i.e. their primary residence. a non-owner occupied property offered as collateral for a mortgage loan of any type is considered far riskier than a primary residence; hence, most lenders won't even consider granting such a loan.

interest rates on first mortgage loans these days are historically low. how is it that you've found a market where "the interest rate is worse"? clearly, costs involved in a refinance, first mortgage loan are higher than those encountered with a home equity, but the rate differential will be better than you have stated, i believe.

that being said, i suppose i could buy that there might be some foolish bankers (what a concept!) who'd grant loans such as you suggest, so it's always worth seeking them out.

but what are the odds of finding a foolish banker? probably not better than 95 out of 100...that's life in these united states in the 21st century.
Posted on: 03rd Sep, 2010 10:24 am
I own two rental properties out right with no mortgage. The first is valued at $51,000 the second at $78,000. I want to know what is the best way to take the equity in these homes to further purchase additional properties? Is this through a HELOC or Home Equity Loan or some other avenue that is better? Thank you Greatly
Posted on: 21st Dec, 2010 05:58 am
Not sure if I know a "best" way to get cash out of your properties, although a traditional mortgage, with rates still pretty low, although having risen in the last couple of weeks, is a good bet.

I think there are pockets of lenders who'll do home equity loans on investment property - it's not a common practice, however. Of course, if you got a HELOC, it'll be based on Prime, which is rock-bottom now. That might just be your best bet if you can locate one. Check with the major lenders, but don't be surprised if they don't offer that product. A better bet for an investor is a local, community-type lender, credit union, etc.
Posted on: 21st Dec, 2010 02:26 pm
I have one rental/investment property with no mortgage worth about $140K and I plan on taking out a HELOC for about 100K. The best company I have found so far is: nationwidemortgage-net. I like the HELOC over the Home Loan because it is less up front money (i.e. HEL closing costs $5,000 vs. the HELOC's 2-plus point higher interest rate).
Posted on: 22nd Jan, 2011 06:33 pm
Huntington will do it, as well as PENfed.
Posted on: 19th Apr, 2011 08:58 am
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