How bad would my credit score hurt if I took out 100k against my home? My credit score is 735 and my home value is 609k paid in full. I also would like to know what you would do in my situation? Would you take out a mortgage on your rental property and continue to takeout mortgages on different properties OR pay the rental in full and use the tenants rent to pay off your HELOC faster? I need help! Please. Im new to this. Im really worried about my credit being run so many times by different mortgage companies then being rejected!
Ironically @Antonio Russo , I would bet that this helps your credit. If your home is owned outright then you're NOT holding one of the largest credit extensions that the average homeowner has, and a $100k loan against a $600k asset would be widely regarded as safe. The more credit you are trusted with and faithfully execute according to the agreements, the higher your score. So, I'd say expect a drop initially and an uptick in the months to come.
I agree with Will. Although(antonio) you are saying in regards to your situation. What do you really mean your situation? That could be an array of things are you saying you want to take $100,000 out to pay off your rental properties is that what you're saying? I don't see it hurting your credit score. Because if you are taking money out on your home, there is established equity, You're most likely either, a) making repairs to create more Equity or you are b) in financial trouble. And given your statement, it doesn't sound like you are in that hole. But if you took a $100,000 loan out on your home and you paid off your rentals then you could use your rentals for your HELOC. But at the same time you're getting the money in the same place it doesn't really matter where the money comes from if you're still paying the same amount. If you Are able to afford it then it's no big deal. You just kind of roll a dice on what you're willing to Do you use your home as collateral for a line of credit or do you want to use other properties that are more disposable to. you
If you're taking a loan requesting $100,000 on a home equity line of credit to pay off the mortgages of two rental properties. and those two rental properties happened to be $500 per month in mortgages. so again if your home equity line of credit payment per month was $1,000 you're just Consolidating your mortgages into one “mortgage” with a different lender which happens to be funded andbacklewd b yline of credit through your homes’equity. It consolidates it makes it easier
And again if your income from those two properties were like 675per property for month you would be getting $350 per month for those two properties cash in your pocket and the rest of the Thousand goes back towards the home equity line of credit. Or you can just put all All of the income from the property back into the line of credit for payment .
This is tricky because they're really not any terms for us to look at numbers Etc to tell you and say hey this is going to be tricky this is going to be easy and this one's a Gamble. Weighing your options can be the most difficult challenge when you start moving money around in different places.
Can I clarify your other comment to continue to take out mortgages on different properties.
I suppose you're saying that you want to continue buying more rental properties and then keep using your home equity (which you may have a better interest rate) to pay off your mortgage on your rental property once you pay that rental property off, you find another property and then you take out another line of credit on your equity and then you do it again and again and again and again or to secure your own asset-- your personal asset where you live you. why wouldn't you just take out equity credit on your rental properties that you have and bounce You are mortgage payments off the previous rental property.
just feel your got and go with your instinct because if you decide to go against your instinct you're probably going to regret it later on down the road benefit you