| A challenge that many current homeowners face | | | | second home tax credit. These buys will certainly |
| is that they do not want to sell now because this | | | | balloon when values go up, making a tidy profit! |
| is such a bad market for sellers. Many people | | | | If you're curious about such options, let me know |
| need the profit from their current home to be | | | | and I'll be happy to give you some guidance and |
| able to afford to buy another one. This is not so | | | | point you to decent resources. If you do decide |
| much a challenge, as it is an opportunity, if you | | | | to get an equity loan so that you can purchase |
| have equity in your home and you know how to | | | | something else, let me know. I don't do loans, but |
| use it. | | | | I can get you some good comps for the |
| Get a low interest rate home equity line of credit | | | | appraiser so that he values your current home as |
| for the home that you are in. There are many | | | | high as possible. |
| opportunities for getting great home equity loans | | | | Another option, depending on how much equity |
| right now with no closing costs and outrageously | | | | you have in your home, would be to sell now at |
| low interest rates. I recently got a home equity | | | | the lower price because of how much you'll save |
| line of credit from Regions bank. The rate is | | | | on your new purchase. I consider this a less |
| currently only 3.75% and carries interest only | | | | desirable option because of the missed |
| payment for 20 years (I pay more than just | | | | opportunity for investment, but it's still an option. |
| interest by choice, but it's good to have the | | | | As a non-short sale/ no foreclosure home, you'll |
| option when it's a tight month). A $75,000 loan | | | | still have to compete with the prices of distressed |
| only carries a payment of less than $200/month!! | | | | sales, but your home will be more appealing to |
| You can actually purchase a home for less than | | | | buyers and realtors because they won't have to |
| $75,000! You can use the money from the | | | | deal with the short sale process. If your home is |
| HELOC in these ways: | | | | currently worth about $225K, but you could get |
| 1) Take the full amount of the loan and buy a | | | | $300K in a couple of years, that's down $75K, but |
| smaller home. You can get a 3BR house starting | | | | you could possibly get a home at ½ its |
| in the 30's, though the ones for at least $50K are | | | | value (now only $250k, but later would cost |
| more realistic investments. You could rent it out | | | | $500K), so that would be a savings of $250K and |
| for 4 years with a cost of only $200/month | | | | a huge savings at the current interest rates. Even |
| toward your loan and maybe $250/month to | | | | after you subtract the $75-$100k that you might |
| taxes and insurance. Depending on what you buy, | | | | be losing to sell now, you'd still be more than |
| there's an excellent chance that you can DOUBLE | | | | $175K ahead, not including the interest rate. |
| your investment within 2-4 years just in the | | | | Current rates are hovering at an unbelievable |
| equity of the sale! | | | | 4.78%!! |
| 2) Take money from an equity loan and use it | | | | To put that into perspective: If you owe $200K |
| toward the down payment on your dream home. | | | | on your home loan, and you were paying a |
| Maybe you're ready for a larger house or you | | | | comfortable 6.5% (historically, this is a LOW rate), |
| always wanted some property where you could | | | | your principal & interest payments would be |
| keep a horse? Maybe you've always fantasized | | | | $1264.16/month, when compared with the current |
| about owning waterfront property? Keep the | | | | 4.78% which yields principal & interest |
| house that you're in as an investment and rent it. | | | | payments of $1046.91/month. That's a savings of |
| Though you may not make much or any profit | | | | $217.25 each month and $78,210. over the life of |
| from the rental, you'll make plenty of money | | | | the loan!! If you were to keep this house until it's |
| when you sell in a 2-4 years and you can still | | | | paid off, that would bring your total savings |
| claim the interest on both loans against your | | | | (minus the $75K lost to selling in a down market) |
| taxes. | | | | as high as $253,000. That's more than the |
| 3) Spend it on a vacation home. This is my | | | | $250,000 you'd be paying for it in the first place. |
| favorite option. Beach properties are opportunities | | | | The drastic changes in the real estate market |
| for short-term rentals- people visiting for a week | | | | have illustrated very clearly that timing is |
| or a month. This gives them higher income | | | | everything. The economy is bad, so many people |
| opportunity, allows you to use them yourself at | | | | don't have the option of buying. If you do have |
| least a couple of times a year, and qualifies for a | | | | the option of buying, it's foolish to wait. |