Refinance, home equity loan or other to payoff credit fix costs

4 Replies

I'm sitting on a flip property that keeps losing buyers and running up against a deadline to payoff my interest free 60k credit card loan to fix the place. Trying to figure out if I should refinance, take home equity loan out, or other option to payoff this card before interest charges start in December. Unless the place sells in the next week, I have to get the loan process started and possibly just list the place for rent. 

So I heard back from US Bank who will not do a refinance or a home equity loan for a house that is on sale or was on sale for the last 3 months... I guess they too want their money. So I'm up to a hard deadline on my credit card.

That's a tough gig. Keep trying different banks, maybe forget to mention it to the next bank that you have it up for sale. Or anonomously inquire. DONT LIE.

@Leland Smith , what does your Listing Agent suggest?

(You do have one, right? And it's "staged" well too, right?) All the best...

[In future, does seasonal timing make a difference there, like it does in many other places?]

@Leland Smith you have a couple of items here to consider.  First, I would recommend analyzing the cost of refinancing.  So if you think you can sell this property in the next 2 months...it might not even be worth refinancing since you will have costs to pay when you refinance.  You could ask the lender to "premium price" the loan....which means they give you a higher rate and pay some of your closing costs. Depending on the rate you have on your cards you will have to analyze if it is worth doing.

Second, the "can't refinance a loan while it is listed for sale" is a conforming, conventional loan rule.  Meaning loans that are governed by Fannie Mae and Freddie Mac (if you recognize those names).  No bank will be able to get around this rule as long as they are offering you a "conventional" loan.  You could find a "portfolio" loan that might be a solution for you.  A portfolio loan is a loan that comes from the bank's own portfolio of money (thus the name) so the bank itself calls the shots.  However, since each bank will govern it's money a little differently than the next bank you will literally have to call each and every bank around to find all the options for all the different portfolio loans.  DO NOT use large banks for investment property financing.  They are terrible and every experienced investor will tell you this.  You need to use a small to mid-sized lender for a higher success rate.  Portfolio loans carry a higher rate than conventional loans so again, if you find one, analyze the numbers.  Maybe just finding a mortgage broker (that's someone who represents many banks) might be a good avenue as well.

Third, if you feel that a conventional loan is the best loan option for you to consider you will have the remove the house for 1 day (maybe 3) so the appraiser can validate that it was removed and then relist.  If you are pulling cash out of this property there are a lot of other rules to be aware of.....so let me know if you need me to go into those and I will. 

Hope this helps!

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