Realtors Update

Using Equity In One Home to Finance the Next

We all know we are facing challenging times and must remain proactive if we hope to meet our business goals. Many homes listed for sale will not sell this year. If you, the realtor, have a client who is relying on the equity in his or her current home to use for the down payment on their next purchase, one of two things should happen:

Your client would need to access the equity through a credit line prior to listing the home or I can offer them a blanket loan, whereby we use the equity in the existing home to purchase the new one. This is available for a primary residence and the current home can only have one mortgage in place. If the current home doesn’t sell, your client may decide to rent the property for a period of time.

Here is an example:

Sales Price of New Purchase: $ 750,000
Appraised Value of Existing Property: $ 500,000
Less Existing Lien on Existing Property: $ 310,000
Total Net Value: $ 940,000

Total Net Value: $ 940,000
Program LTV (max 80%): 80%
Maximum Lien Amount: $ 752,000

Maximum Loan (cannot exceed $ 750,000
Purchase price)

Let’s get those listings closed! I am here to help you.

Patty