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snoopyloopy · 10-31-2007, 02:07 PM

Ok so I bought my house this year in may, I put 13,000 down on loan. I had just taken out a loan to pay off all my credit cards and it has a high rate 23apr. I seen rates are real low for home equity at my bank. my question is.....even though I've only had my house 6 months can I get a home equity loan? also My loan has a prepayment penalty the first 3 years "lower the longer" , so would I still even be able to get a home equity loan? also would this be in my best interest to even do this?<br />

DDT · 10-31-2007, 02:07 PM

try it and see. the pre-pay penalty has nothing to do with this. your 23% loan is a big mistake, and you have to find a way to pay that off.

sox · 10-31-2007, 02:07 PM

I took out my Home Equity Line of Credit the week after I closed on my house. I took the money and paid off my car. That way the interest I paid could be used as a tax deduction.

Taking a HELOC in in reality a second mortgage. It has nothing to do with your first mortgage, and will not result in you getting any type of prepayment penalty from your mortgage company. There are often penalties, though, if you close out the HELOC in the first three years. You can keep it open with no balance, though. I've had no balance on my HELOC since I paid off my car 5 years ago, but I pay my $25 a year fee to keep it open just in case I ever need the money...

Go for it!

valentina · 10-31-2007, 02:07 PM

Generally, if you just bought your house six months ago, you will only qualify for an 80% Loan-to-Value ratio. That means that you have to own more than 20% of equity in the home before you can borrow against it. If your house is worth $65K, then the $13K you put down is about 20% of the value, and anything that you've paid on the principal above that, as well as any appreciation the house has received in the past six months, is considered equity you can borrow against.

There are some lenders that will make you a 90% loan-to-value ratio, and some that will even do 120% loan-to-value, but I'm not sure it's a good idea to owe more than your home is worth.

Good luck.

10-31-2007, 02:07 PM	#1
snoopyloopy Greenhorn Join Date: Dec 2006 Location: Killa Cali Age: 24 Posts: 15 Rep Power: 0	Home equity with first year mortgage? Ok so I bought my house this year in may, I put 13,000 down on loan. I had just taken out a loan to pay off all my credit cards and it has a high rate 23apr. I seen rates are real low for home equity at my bank. my question is.....even though I've only had my house 6 months can I get a home equity loan? also My loan has a prepayment penalty the first 3 years "lower the longer" , so would I still even be able to get a home equity loan? also would this be in my best interest to even do this?<br />

10-31-2007, 02:07 PM	#2
DDT Greenhorn Join Date: Jul 2006 Posts: 15 Rep Power: 0	Home equity with first year mortgage? try it and see. the pre-pay penalty has nothing to do with this. your 23% loan is a big mistake, and you have to find a way to pay that off.

10-31-2007, 02:07 PM	#3
sox Piggy Bank Join Date: Jul 2006 Posts: 59 Rep Power: 6	Home equity with first year mortgage? I took out my Home Equity Line of Credit the week after I closed on my house. I took the money and paid off my car. That way the interest I paid could be used as a tax deduction. Taking a HELOC in in reality a second mortgage. It has nothing to do with your first mortgage, and will not result in you getting any type of prepayment penalty from your mortgage company. There are often penalties, though, if you close out the HELOC in the first three years. You can keep it open with no balance, though. I've had no balance on my HELOC since I paid off my car 5 years ago, but I pay my $25 a year fee to keep it open just in case I ever need the money... Go for it!

10-31-2007, 02:07 PM	#4
valentina Greenhorn Join Date: Jul 2006 Posts: 7 Rep Power: 0	Home equity with first year mortgage? Generally, if you just bought your house six months ago, you will only qualify for an 80% Loan-to-Value ratio. That means that you have to own more than 20% of equity in the home before you can borrow against it. If your house is worth $65K, then the $13K you put down is about 20% of the value, and anything that you've paid on the principal above that, as well as any appreciation the house has received in the past six months, is considered equity you can borrow against. There are some lenders that will make you a 90% loan-to-value ratio, and some that will even do 120% loan-to-value, but I'm not sure it's a good idea to owe more than your home is worth. Good luck.

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