Updated over 7 years ago on . Most recent reply
HELOC
I owe 110,000 on our personal residents that was just appraised at 260,000. Now I'm new so this might be a silly question but here it is. If I took out a heloc on 80 percent of the 150,000 now and the housing market dropped out again would I still have the 120,000 heloc even though the house wouldn't be worth that? Here's my thinking. I take out that line of credit but don't use it. If prices drop again I could buy an investment for a good low price.
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#3 Real Estate Deal Analysis & Advice Contributor
- Rental Property Investor
- Mercer Island, WA
The LTV limit for the HELOC will be based on the value and both loans. So, if a lenders says they will go up to 80%, that doesn't mean 80% of your equity. It means 80% of the value. 80% of $260K is $208K. Less the existing $110K loans would mean you could get a HELOC for $98K.
If you get a HELOC, don't take the cash and values fall, they may restrict your ability to take money out of it. Many of us had HELOCs frozen by Chase during the bust.