Real Estate Professional · San Francisco-East bay, CA · Member since 2013 · 340 posts · 50 votes
Hi,
I suppose folks here dont cross me off as crazy. ( I think am tyring to be creative). May be many people may have already thought about this.
I am in a contract to buy a house. I will bring in all the cash for the closing, but looking to get a cheque back from escrow through any lenders, banks who would give me a home equity right away. Is that an option?
Real Estate Lender · South Jordan, UT · Member since 2014 · 29 posts · 4 votes
12y
It sounds like what you are trying to do is to buy a home and get cash-back (in the form of an equity line of credit). I don't think that is possible to do at the same time.. If it sounds fishy, be sure that a lender will want an explanation of your motives.
An important fact to consider is that home equity lines of credit (HELOCs) are limited to 80% loan to value (LTV), with some credit unions going as high as 90%. But for the loan to value in your situation, they might decide to use the purchase price as opposed to the appraisal value. This might be another issue for you.
I would say to check with a local credit union and see what their policy is. Or if anyone on the forum has more experience with HELOCs.. let them come forward :)
Real Estate Professional · San Francisco-East bay, CA · Member since 2013 · 340 posts · 50 votes
12y
Thanks for replies, folks.
To give some background, why I am asking this.
I have made a successful bid on an auction for cash by. While I do the cash buy, I dont want to buy it and get low on cash. Since the auction contract is "Cash Purchase", I cannot finance it now. Therefore the thought. I can wait for some time and rent it out and eventually get an equity. Till then, I would be stuck. I am looking for that liquidity for the period in between.
I do understand, that the lenders would look for assessment and valuation. I am banking on the fact that i got a deal on this buy lot below the actual value of the property plus I am doing a 25% of my purchase cost down. Well, no harm in throwing out a question and may be learn, if there is really such an option.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
12y
I'm not sure you could do it right at your closing, but lenders will refinance a property quickly after purchase. The key is they're going to use the price you paid as the "value", or an appraisal if that's lower. And then they will lend you 75%+/- of that value. Often folks want to use a new appraisal to get a higher percentage of their cash investment back. For that you'll have to wait six months, perhaps a year. But if you're willing to use the lower value you should be able to find a lender. As for any investment loan you'll have to make a lot of calls or have a good broker.