Clayton's Journal

Hey Clayton,

There's plenty of avenues you can take with that money. Just do your research. Try looking for some distressed properties in your area. You may find some real bargains and that loan will let you act quickly!

Welcome to the family.

That's like having $125,000 cash in your hand to invest with! Be wise and that $ can go a LONG, LONG way and make you a ton. Congratulations and have fun! Don't be in a hurry to use it all, watch for those great deals!
Keep us posted, and thanks for starting a journal.

Best wishes,

Rina

Unless I misunderstood you, you do not own any property. There fore you cannot get a home equity loan, since the HELOC is based on the value of the home. So I think what you got was a marketing mailer, but contact the bank regarding a purchase loan and see what you can get as far as a purchase loan to start buying property.

Not to be the wet blanket or anything but I use to get those same "pre-approved" offers before I owned a home as well and it was marketing. But if you have the credit to pull a loan, then use it.

Good luck

I was so excited for you, I read right past that little bit of info. Thanks Anita for pointing that out. Let us know what you find out Clayton.

Rina

Yup, you're exactly right! That's why I mentioned the fact that I don't currently own a home. I've been at the same bank for some years now and because I do have some tenure and excellent credit they often extend me offers like this one. Sometimes it's personal loans, or new car loans and even student loans. (I'm a full time student right now) This offer tempts me to go ahead and invest in a property that would have the kind of equity that would allow me to maximize the loans potential. While I am looking for that property I wondered if anyone had any ideas or experience with HELOCs.

Thanks for the welcome James.

I have a couple properties on my list that look like they could be good ones. The only thing is that the pre-approved money is a credit line based on the value of a property that I already own and I don't yet own any property. Have any ideas what to do with the offer once I do have a property?

We've got a HELOC and it works great for instant access to money for down payments, earnest $, etc. You don't have the hassle of trying to get a loan when you need it, and you are only charged interest on the amount you currently have out each month. PLUS there is no minimum payment on the principal, you only have to pay the interest.

So the money would be there if I needed it. I was thinking of buying a home that I could use the HELOC to improve and sell the home a couple of years down the road. How does the home's apprasial value effect the amount of credit a bank will extend me? Does the home have to be worth much more than $125K or right at it? Does it depend strictly on the automated valuation model (AVM) that the bank uses or should I request a human appraser to give me better numbers?

Looks like you're pre-approved for $125,000. On the HELOC we got this year our bank actually gave us 100%. That may or may not be true for you. Call or go in and check it out. My guess is you'll have to be looking for a house around that much or less. And, yes, I'm sure your bank will want an appraisal on whatever you're going to buy. Try to find one of those GREAT deals and you'll probably have enough to work with for rehab if it needs any.

And I do think there's a difference between a Home Equity Loan and a HELOC Home Equity Line of Credit. Correct me if I'm wrong, anyone.

First step, though, would be to get together with your banker.

Good luck, Clayton.

Rina

I didn't think you could get a heloc without a home either. But, if your credit's that good, why don't you get your business entity set up (a corp or LLC) and apply for business lines of credit? They will give you amounts up to a couple hundred grand in a few months if done right. But again you have to use it wisely so you can be sure to make the payments and in a timely manner.