Can you pull out equity on a new-build home after 6mo. to a year from purchase date if the only equity in the new house is coming from the down payment (which is well over 20% of the house value)?
You can pull equity out at any point if the equity is there. I built my home last year and looked into a HELOC a few months ago and the lenders never mentioned the newness of the home. Their only concerns were the value of the property and my credit situation.
Thanks, @Bob Okenwa . I've read up on the basic differences b/w HELOC, home equity, cash out refis. People determine the type largely based on what they intend to do with it. That said, for this particular situation of a new house with the down as the only equity in the house, is there any difference in ease of access b/w a HELOC , home equity loan, refi?
A cash-out refi will probably require 6-12 months of seasoning, but that varies by lender. From my own conversations with lending institutions, they seemed to be more willing to do a HELOAN over a HELOC, but that's just my own experience. There were some lenders willing to do over 100% for a HELOAN, but only 80%-90% on the HELOC. Not exactly sure why to be honest. I only put 5% down on my home, but the equity is there based on how much more others in the area have built there homes for. There were people in my community that spent 65k more than my wife and I did on the same model of home and also, there are similar sized homes, but about 10-15 years older that have sold for over 100k more than mine but those are just about 1 mile away and are on the most-outer limits of what an appraiser would use as a comp.
@Bob Okenwa - thanks for the additional info. Appreciate the time. And glad that worked out for you without having to put much capital into the home, in the first place. Interesting note on the lenders being more lenient with a home equity loan...I'd assume with a home equity loan you have to borrow upfront and end up paying two loans right away regardless of when you need it. They might make more money upfront as opposed to the HELOC where I assume you don't start paying and just the interest until you actually use it. HELOC seems a better way of having reserves on hand even if you don't have a property ready to purchase.
Glad to help. Now that you mention it, they stand to make much more on the loan than the line of credit since I'd be paying it back immediately versus only using the HELOC intermittently.
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