OfflineHi, My question is this, my girlfriend owns a house in Illinois, in her neighborhood there are many foreclosed homes by HUD on the market for 20 to 35K. Some of these homes have more squre footage then hers. Her home is clean and in turnkey condition but she has it on the market for 69900 and can't sell it. She lives with me in NJ and her house in Illinois is vacant and on the market. We spotted a house in Florida that we want but we need to sell the Illinois house to get the downpayment for the house in Florida.
She only owes 2,500.00 on her house and the mortgage is , if you can beleive this, $25.00 a month.
If she pays off the house and has no mortage on it will the bank refi the house for the 20 grand we need to put down on the house in Florida? I have heard that banks will not refi a vacant house. The rentals in her area are 650 to 750 a month we figured if its not selling now she could refinance it for the 20 grand we need and then rent if for 750.00 a month and that would cover the equity loan and the taxes and she could also pocket a few bucks. But don't know if the bank will refi the home if its vacant. Any input would be appreciated, thank you
...because most banks will not loan less than 30K on a mortgage, or if it's for sale. Have her rent out the property. If her credit & loan to debit ratio is good, have her get a home equity line of credit : therefore she can take out only what she needs(20K for down payment)& pays on only what she takes. (I have a 300K line that is interest only, at 2.75% which would run only $ 630.00 per month). Her rent covers,her taxes, insurance, maint/repairs & home equity line of credit payment, & still have a positive cash flow. When the market turns around, then sell.
Thank you for the input. Her mortgage conditions are home owner occupied, in other words they gave her the loan 20 years ago as long as that was her primary residence not an investment property to be rented, if she rents it the bank may want it paid off, no big deal because she only owes $2500.00 on the house. Would they give a line of credit before she rents it or does the house have to have an active lease on it?