Posted on: 05th Nov, 2008 10:06 am
I have a home equity lien on my homestead that was originated 2 years ago. We are trying to build a new addition and double the size of the house. Does anyone know whether I can refinance/convert my current loan into a construction loan? If not, can I subordinate the home equity lien to a new construciton loan? If not, how can I get financing to build the house? Thanks for any help.
hi cowtown construction!
welcome to forums!
you cannot convert your current loan into a construction loan but you will be able to take a separate construction loan. if you have paid your earlier loan regularly and have not defaulted ever, then the lender will agree to subordinate the home equity loan. if you have not paid the dues properly, then the lender will ask you to keep the earlier loan primary.
feel free to ask if you have further queries.
sussane
welcome to forums!
you cannot convert your current loan into a construction loan but you will be able to take a separate construction loan. if you have paid your earlier loan regularly and have not defaulted ever, then the lender will agree to subordinate the home equity loan. if you have not paid the dues properly, then the lender will ask you to keep the earlier loan primary.
feel free to ask if you have further queries.
sussane
Hi Cowtown Construction!
I think you won't have any problem in getting a construction loan. But it's true that a home equity loan cannot be transferred into a construction loan. The earlier loan becoming a subordinate loan will be totally a lender's discretion.
Thanks
I think you won't have any problem in getting a construction loan. But it's true that a home equity loan cannot be transferred into a construction loan. The earlier loan becoming a subordinate loan will be totally a lender's discretion.
Thanks
Hi,
Yes , I thing you can convert the home equity loan to home construction loan by Refinancing.
Refinancing is replacing your existing mortgage loan with a new loan .
And you have benefit for that If interest rates have dropped since you last financed your home, refinancing at a lower rate can save you a lot of money.
Refinancing has some rule to know for that you should gather information.
Regards
Dilip
Yes , I thing you can convert the home equity loan to home construction loan by Refinancing.
Refinancing is replacing your existing mortgage loan with a new loan .
And you have benefit for that If interest rates have dropped since you last financed your home, refinancing at a lower rate can save you a lot of money.
Refinancing has some rule to know for that you should gather information.
Regards
Dilip
you can typically finance new construction on an existing home with a 203(K) renovation loan - an fha product. the existing home equity loan would, in all likelihood, be rolled into the new first mortgage loan; there is a possibility that you could have it resubordinated, depending on overall value, and your qualifications.
