Google
 
Web DebtSmart.com

SAVE BIG ON PHONE CALLS!

No switching! Low International rates! FREE minutes and much more!
For a limit time get the DebtSmart Loan Calculator for FREE when you sign up!
 

 

SPECIAL:
Buy 1 book,
get all 3!

GUARANTEED TO SAVE YOU MONEY! If you don't believe that you can save 10 times the cost of this book, then return it for a full refund and keep the other books as a gift!
 

Articles & Statistics

By Category
By Author
Credit and Debt Statistics Database
Household Math™ Problems
Surveys & Results
Quizzes & Tests
FREE DebtSmart Column: Add articles to your newspaper, magazine, ezine, or web site!
 
 

STOP DEBT COLLECTORS

Stop Debt Collectors Cold! Plus four (4) special reports! Finally, a solution for dealing with these horrible collectors!
 

DebtSmart
Email Newsletter

Past Issues
Subscribe free to the email newsletter
 

Media Kit


Television Interviews List
Background and media info
Book Info
Book Reviews
What the media is saying
Radio Interviews List
Suggested Interview Questions
Press Releases
Contact
 

Get NOW!

FREE subscription to DebtSmart® Email Newsletter
FREE Software
5 Year Loan Worksheet
DebtSmart® Products and Services
 

Questions

Ask Scott Bilker a debt question
Read answers to Scott's questions
Ask Craig Thor Kimmel, Esq. an auto or lemon law question
Read answers to Craig's questions
 

DEBTSMART

Book, magazine, and software reviews
Radio Shows
TV Shows
Contact the publisher
Advertising
Search
 

 

 

 

 

Equity Used For Down Payment
by Scott Bilker
Scott Bilker is the author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. He's also the editor and publisher of DebtSmart®.

Scott BilkerScott,
Here's my question. My husband and I want to buy a home being built in a new development. Our present home worth $260,000 has no mortgage except a $30,000 home equity loan. We need about $15,000 down payment for the home being built. Should we open a home-equity line of credit to pay the down payment? We will be selling our existing home so everything will be paid back at the settlement. If not, where is the best place to get the $15,000? We have several credit cards with 0 balances. Should we take a cash advance on one of those? Thanks.
--Marian

Marian,

Great question!

Coming up with the down payment for a house is always a major concern. When my wife and I purchased our house, we had to use our credit cards, and other strategies, to come up with the cash. However, this is risky because mortgage companies want to be sure they track all the money for that down payment. They don't want you to borrow from your credit cards because you must come up with actual cash. Or else, it's a 100% financed home.

Do you like this article?
After you're done reading this article please send us your comments! 
Click here to take article survey!

If I were you, I would get the money from the home-equity line of credit since it's linked to your existing house, or simply get a home equity loan. In fact, you could probably get a super large loan, like say, $150,000 and use that as a down payment since your home is going to be sold by settlement time.

Since you're putting down such a large amount toward the new home, the mortgage bank won't really care too much about the new mortgage since they're lending you far less than the value of the house. Then, when you sell the existing house and get $260,000, you can pay back the $180,000, still have $80,000 cash, plus have $150,000 equity in the new home!

The bottom line is that since you're going to be selling your existing house, and you have a lot of equity, you also have creative financing options.

Good luck and please let me know what happens!

Regards, 
Scott

UPDATE

Scott, 

Just to fill you in, we opened the line of credit for our down payment. Our old house settled in May for more than we anticipated, and we made settlement on the new house in July. 

We only needed to take a 10 year mortgage with a 4.62%!! Not bad huh? Thanks for your advice. 

I love your newsletter. 

--Marian
 

READ RELATED ARTICLES

Articles written by:
  Scott Bilker

Categories:
  Financial Planning
  Mortgages
  Question And Answer

 
 

DebtSmart® News

Latest news release
Add RSS news feed:  
 

Coupon Codes

Enter your coupon code to see valid offers.

 

Subscribe FREE  and  you receive the 5-Year Loan Worksheet software FREE!
"The DebtSmart Email Newsletter is packed with cutting-edge strategies for solving credit problems. I highly recommend it."—Gerri Detweiler, author of The Ultimate Credit Handbook
"I received Debtsmart about a month ago and I love it!!! I learned so much. Great tips!!! Keep up the good work!"Vanessa Keith, Amarillo, TX
 

Visit CardRatings.com for 18,000 Free Credit Card Ratings!
 

 

DebtSmart® Solutions

Buy 1 book, get all 3! Talk Your Way Out of Credit Card Debt plus 2 books as gifts (Credit Card and Debt Management and How to be more Credit Card and Debt Smart)


CREDIT SECRETS BIBLE: Raise your credit score! Learn how to fight back against those who are making your life difficult--and holding you back!


DebtSmart Mortgage Comparison Calculator (and FREEWARE)


DebtSmart Basic Debt Elimination Financial Package


DebtSmart Download Debt Elimination Financial Package


DebtSmart Loan Calculator


No Bills! Complete Financial Suite


30-Year Loan Worksheet


37 DAYS TO CLEAN CREDIT: How I Deleted 9 Inquiries, 5 Negative Accounts, 4 Major Default Accounts, 1 Judgment, and Boosted My Credit Score 135 Points In Only 37 Days!


See all products...

 

 

 

Copyright ©2014 Press One Publishing. All rights reserved. Use or purchase of any material at DebtSmart.com including but not limited to books, articles, and software is subject to the following  disclaimer/warning.