Hi guys, Talk to me about home equity loans? Is this what people normally do if you buy a house and need to pay for remodeling and you don't have tons of liquid cash lying around? This sounds like a odd question but is this normal? When I did the updating of my current house I had cash on hand to do the work. My parents have always paid for remodels in cash. So essentially you have a note on your house plus a second note for the repairs? Basically should I avoid a house that needs a lot of work to avoid a home equity loan or should i find a house that needs work and remodel it to our likings and just have two notes.
So you don't own the house in question? I'm no expert, but if you're already thinking about borrowing money to buy a home that you will then need to get a loan against your equity (what equity, you haven't even bought it yet?) to pay to repair it, it doesn't sound like the best plan.
how much equity do you have in the house? I believe you only qualify for 85% of what your home appraises for minus the amount you still owe on your first mortgage. so if its a brand new house you don't have much money in, you either A) may not qualify or B) Not be able to pull out as much as you would like. the advantage is that the interest rate is ussually around mid 3% which is about as good as your are going to get.
I own one house. I would take a HEL against that house to fund the remodel of the new one I would buy. I have paid off 2/3 of the note already.