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mccabes investment group
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Location: Washington, DC
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| ALL Investors and Real Estate Experts (IN HERE PLEASE) |
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I have a scenario...
I purchased a house last year and now that my year there is over! I'm ready to use the house for a rental property. My question is....
I have $13,000 of equity in my house. I'm thinking about taking the equity out of the house between 8k-9k. And use that money as a down payment or to pay closing of another property listed at about 50k. The other thing is that my credit score is kind of low 580 and I have national city mortgage as my lender. Now is it still possible for me to pull out this equity with that score and is that the best procedure for me to follow in obtaining my second property?
*Note* I'm trying to get another property before next year to claim (2) houses on my taxes in 07'
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Wed Aug 02, 2006 3:06 am |
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Rolo
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Your score impacts your interest rate (risk to the lender).
Your debt/income ratio impacts the loan amount/qualification.
"Expect me when you see me."
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Wed Aug 02, 2006 3:55 am |
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mccabes investment group
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| ok... |
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ok Rolo thanks but I kind of already knew those (2) factors. my issue is basically knowing if the procedure/scenario that I'm taking a good one.
also my debt to income is fine and will be much better once i rent out the property, but with the credit score does anyone know of a bank or lender who'll give low or moderate interest rate with such an average/low score?
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Wed Aug 02, 2006 5:06 am |
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jasonm
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| 2nd home |
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It may be hard to pull out a line of equity with that fico score but not completely impossible. The rate would be pretty high like 11.5-13%. There are a lot of creative ways of getting the loan to work but it would probably benefit you to do some credit repair if possible to boost your score past 620 to get a decent rate... but at $50,000 who cares what the rate is. feel free to email me with any questions.
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Thu Aug 03, 2006 8:10 am |
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bong12187
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| Re: ok... |
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quote:
Originally posted by mccabes investment group
ok Rolo thanks but I kind of already knew those (2) factors. my issue is basically knowing if the procedure/scenario that I'm taking a good one.
also my debt to income is fine and will be much better once i rent out the property, but with the credit score does anyone know of a bank or lender who'll give low or moderate interest rate with such an average/low score?
I don't know of any bank or institution that will give you a low interest rate with your FICO score. But i'm sure that there is bank out there that can give you a loan. But if you are going to use this second property as an investment I don't know why you are worried about the interest rate. If you've done the numbers and the return still looks good, then don't sweat the interest rate too much.
What you need to figure out is what is the return on your investment based on the money that you will be putting in. I usually walk away if it is less than 15-20%. Factors I look for are the following:
1. cash flow or cash on cash return on investment
2. appreciation
3. loan reduction
4. depreciation
Combining all four elements will give you your real return for your real estate investment. Good luck...
B
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Sun Aug 20, 2006 8:45 pm |
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oldguy
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I'm trying to get another property before next year to claim (2) houses on my taxes in 07'
Not sure what you mean by "claiming a house on your taxes". Can you explain? 
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Sun Aug 20, 2006 11:40 pm |
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Kiaser
Senior Member
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You'll be putting your current home up as a security (collateral) so yes you'll be able to get a home equity loan. Just like the others said, the amount and interest rate will be decided by your credit score and debt-to-income.
Also, you better get a renters contract ready before you go to closing on the equity loan, a renters contract will help knock down your debt-to-income ratio (and hence get a higher loan amount).
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Mon Aug 21, 2006 12:07 am |
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foxi$
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Joined: 22 Aug 2006
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| GO FOR IT |
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WHAT U GOT TO LOSE ADVENTURE HAPPINESS GREAT TO BE WHERE U WANT TO BE IF U CAN DO IT CONGRAULATION TAKE A SMALL RISK YOU NEVER KNOW BUT THEN U HAVE 2 HOMES IT MIGHT BE WISE TO GAMBLE OR SIT WATCH OTHERS THIS IS WHAT IT ABOUT ...
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Tue Aug 22, 2006 8:12 pm |
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