Equity Home Loans

continued from previous question/home equity loans?

The house I am planning on buying already has equity in it. If I plan to get a home equity loan to pay off all of my other bills besides the house payment, can I ask my lender who approved me for the home loan to give me a home equity loan at the same time? How do I do that? & wouldnt it look better to them anyway, because I am playing it smart and paying off all of my other debt with it in order to focus on paying the mortgage?

Public Comments

1. u can ask , don't hold ur breath on it unless u put a large down payment.
2. You can't do both at the same time. The property has to be reappraised. Also, you have to qualify for the full amount of both loans. If you have other debts this may not be possible. Since you were preapproved you have an idea of what you can approve for. Both loans would not be able to exceed that amount. I also recommend you do not reach the full amount of preapproval, money will be too tight.
3. The owner of the house has the equity not the house itself. You won't qualify for a home equity loan because you have not owned the house in question long enough to build the equity. No lender is going to do that nowadays. It would be a RED FLAG to any lender. It is not smart because the debt ratio should have been taken care of before purchasing the home.
4. This one could go either way. Say the house appraises at $100,000 but you are paying only $85,000. There are lenders that will loan up to 100% of the appraised value on a property. Programs thru FHA have 100% financing on qualified properties. It takes more to use FHA than a bank loan, but if you want to truely pull the equity out of the property, a 100% Loan is what you need. There are alot more qualifing factors for this type of loan, you need fairly good credit scores, good debt to income ratio, and at least 3 good lines of credit that reflect a good pay history. There are some major mortgage companies that have "mirror" loan programs that do 100% financing up to the appraised value. Wells Fargo and Citibank had them going into the last quarter of 2007. Call around and check them out.