Using a HELOC before a Sale

[Tony Thomas]

We have a quad that has a HELOC on it. We are thinking about using that HELOC to make the down payment on a new property. We are also looking to sell that quad. If there is an outstanding balance when we sell the quad, would that just be rectified by the title company? Are there any pitfalls, landmines, or possible penalties that we need to be aware of before using the HELOC?

[Andrew Postell]

@Tony Thomas any time you sell a property, the liens on that property are seen on the title work and cleared (or paid off) before you sell it. If there are any penalties to using your HELOC in that fashion, you would need to check with your lender. Usually, there are not but I obviously can't speak for them here. Just give them a call to verify. Should be ok though.