Secured Borrowed Funds for Closing

Real Estate Agent with Resort and Second-Home Specialist REALTOR Broker #21673

Spirit Messingham posted this concise blog about what funds will orwon't qualify for home purchases. New buyers may not realize that they can't use a credit card to cover part of there home financing. sometimes it is important to review the basics with our clients.

Original content by Spirit Messingham SA624527000

Funds for closing costs must be from an "allowable source" and properly documented.  Unsecured borrowed funds are not allowable, such as a personal loan or advances from a credit card.  Secured, borrowed funds are allowable.  For example, a consumer can get a personal loan against the equity in a home they own to buy another home.  There needs to be a note with monthly payments and a recorded deed of trust securing the note against the property.  Evidence of receipt of the loan proceeds in the consumers bank account or in escrow is required.  The consumer could also tap Home Equity Credit Line (HELOC) against a property they own. The payment on the secured, borrowed funds will be used in qualifying the consumer.


Thinking about buying a home?  First thing a buyer should do is get pre-approved with a local lender.  Next, start a relationship with a Realtor.  I would recommend one with experience in the area you are looking and an experienced buyers agent.  Not all agents are the same, choose wisely.  Ask friends, family, or co-workers for referrals.  Same thing for lenders.  Or you can consider another source like Yelp or reviews.

Good luck, remember buying a home should not only be an exciting but an educational experience.


You can learn more about working with Spirit, including 150+ reviews written by past clients, here:


Spirit Messingham, PLLC

3rd Generation Full-Time Realtor®

Tierra Antigua Realty

Direct (520) 471-6900


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Please call or email me if you are considering selling or buying a property on Kauai. I work with a sales team that are experts at helping you make the right move!


Kathleen Luiten, REALTOR Broker                                                                         


CENTURY 21 All Islands



Don't just dream, call Kathleen!


Comments (1)

Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Thanks for re-blogging this, Kathleen - I would have missed it, and it's a good read.

Dec 18, 2015 12:37 AM