HELIC'S & Due on Sale Clause
Hi all. Still new here getting to know my way around a bit. I will be gaining a significant amount of equity in my current home due to a great neighborhood and the addition I am doing. Starting to learn a bit more about the Due on Sale Clause. I was planning to use some of this equity to by my 1st, and maybe 2nd, buy and hold property. Now. Getting to the LLC side of it. I was going to eventually roll my properties into a LLC. I read about the lender calling the HELOC if I sold the residence the HELOC was derived from but nothing about if I roll the asset(s) themselves. Keep in mind, I dont plan on moving for a very long time.
Thanks for the input.
Most Popular Reply
In normal home sales, property title liens like HELOC are paid off from a home's sale proceeds. Say you have a $200,000 first mortgage and a $50,000 home equity loan and you sell your home for $400,000. At your home's sale closing, your $200,000 mortgage and your $50,000 home equity loan are deducted from your home's sale proceeds, leaving you $150,000 ($400,000-$200,000-$50,000 = $150,000). In order to clear your now-sold home's title and make it marketable, any liens must be eliminated.