All Forum Posts by: Sean Gallagher

Looking to see if someone can better explain this for me, say a home purchase price is 150k and 30k is needed for down payment, relative seller agrees to a gift of equity of 30k, so the lender approves the buyer for 180k.  I'm having a hard time figuring this out, would the loan be for 150k with 120k owed?

SO here is an example of my closing cost, approximation if I was to put 5% down. What in here would you really expect the seller to cover? I'm trying to use this and see if you were purchasing all cash the fees you would run into.

Even if you're a cash buyer I still see decent closing cost?  Title fees, any realtor fees, transfer tax.  I'm looking at about 5-6k through lender, supposedly.  Will know exact amount when done 

Oh ok understood 

10k mo cash flow, 4 properties, sorry I have to ask, what type of properties?  Vacation rentals I'm assuming?

Yeah I'd say that's a great point, having that buying power readily available.  So here's a question, if you pay off the credit line is it similar to a credit card in that it's still available.  Say heloc for 25k, you pay it off, do you still have 25k available/ a heloc.  Thanks for mentoring me here!  

What type of property did you just close on?

Thanks Jim. Not a bad idea and I did think about doing this. Paying more for the property and then receiving the difference in the form of a "gift." It all depends on the appraisal really. Figure in order to get that PMI off I need an LTV of around 78-80%. Altogether I think I'll be happy to lock in a low mortgage payment and set this home up to flow and move on. I'll probably live there for 3-6 mo before renting. Once that PMI drops, mortgage total with insurance, p & I, taxes will be in the 600s, I see no problem renting for 1200. Let it continue to build more equity and I can go from there.

The only downside I see to a HELOC is the interest. Is the idea here for the HELOC on the next property to use it as down payment / closing & any little repairs, then can refi the property, pay off the line of credit and move on? I see some credit lines have a penalty for paying off the balance early but I think this may be a good idea with the right credit line.

You have creative ideas and are very helpful thank you.

Great info, I'll have to look into it, as for paying back the heloc in a timely manner and any associated fees/ charges that may occur over the length of the heloc

Hmm I was under the impression I would have to refi to get the pmi payments dropped. If I can just get an appraisal absolutely. The lender said at 6 months I could get it dropped. I'll have to ask him about it. So a HELOC, I'm still quite learning what its all about, it doesn't affect the mortgage rate/ terms at all? Its simply like a whole separate loan and I'm using the equity in the home to secure it, kind of like using it as collateral? Without the actual terms of my mortgage changing. Thats interesting, sounds dangerous too, like it could get out of hand. What do you mean by it can go up to 100%? I'm assuming the HELOC is based off the equity value?