tbg@apollo.uucp (Tom Gross) (03/13/86)
A number of people have responded to my posting about
using a 2nd mortgage as a down-payment on another piece
of property. The consensus is "all they care about is
whether you can carry the debt".
Let me try to clarify what I am asking (quickly). It was
my impression that mortgage makers (whatever they are called)
want to see that you have a certain amount of EQUITY in the
house YOU are buying with THEIR money; the theory being
that you are not likely to walk away from a property if you
have at least 5% of your own cash invested in the property.
Otherwise why don't banks do 100% financing? Or for that
matter why doesn't everybody buy absolutely all the apartment
buildings they can and if any don't provide positive cash
flow just let the bank worry about it?
My question is then will banks be satisfied that I have enough
at stake if I "take equity out of one property and into another"?
I realize that the people who process loan applications just
follow procedural rules and tend to be somewhat literal-minded
but does anyone have any actual experience doing this?
If it works, should I go on cable tv and offer to sell
cassettes of myself talking about it for $295???
Tom Gross
Apollo Computer, Inc.
Chelmsford, MAdave@cylixd.UUCP (Dave Kirby) (03/17/86)
In article <2c78c374.2a75@apollo.uucp> tbg@apollo.uucp (Tom Gross) writes: > My question is then will banks be satisfied that I have enough > at stake if I "take equity out of one property and into another"? > I realize that the people who process loan applications just > follow procedural rules and tend to be somewhat literal-minded > but does anyone have any actual experience doing this? As long as your equity in your former property remains above 20%, I don't see why anyone would object. > > If it works, should I go on cable tv and offer to sell > cassettes of myself talking about it for $295??? Sure, even if it doesn't work. Especially if it doesn't work. :-) ----------------------------------------------------------------- Dave Kirby ( ...!ihnp4!akgua!cylixd!dave)