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A Surprise May Await a HELOC After Closing

By Elizabeth Weintraub Sacramento Broker

Real Estate Agent with Elizabeth Anne Weintraub, Broker DRE #00697006

April 08, 2016 03:17 AM

We have a lot of buyers in Sacramento right now who are overlooking repairs that need to be done to a home. They still pay over list price even if the walls were clawed to shreds by cats, as evidenced by a recent sale in Sacramento. They will do anything to buy a home because we have very few homes for sale.

Due to the flurry of buying homes that are in need of repair and not asking the sellers to fix them up, many buyers want to obtain a home equity line of credit after closing.

Not so fast. Few homebuyers realize that they might not be able to secure that HELOC right away, even if they have the equity to support it. You can read more in my personal blog today about this little quirk at this link: How to Borrow Against Equity After Buying a Home.

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Michael Jacobs

Pasadena, CA

Pasadena And Southern California 818.516.4393

Good morning, Elizabeth -- interesting topic. I can't remember a time when I was made aware of this situation by a client. Obviously a mishap occurred that prompted this post. Hmm...there must be yet another story...

Apr 08, 2016 03:35 AM

Joan Cox

House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO

Denver Real Estate - Selling One Home at a Time

Elizabeth, great advice, and we are seeing the same thing here, they buy the home with all its flaws, and plan to remodel/update after closing.

Apr 08, 2016 05:02 AM

Bob "RealMan" Timm

Ward County Notary Services - Minot, ND

Owner of Ward Co Notary Services retired RE Broker

Even when things were crazy here with the oil boom I did not see that kind of activity Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents BTW any home with cat damage of any sort would be totally off my list.

Apr 08, 2016 05:05 AM

Wayne Zuhl

Remax First Realty II - Cranford, NJ

The Last Name You'll Ever Need in Real Estate

Hi Elizabeth,

This is great information for buyers in the Sacremento area. The more knowledge we give them the better they are.

Apr 08, 2016 06:07 AM

Conrad Allen

Re/Max Professional Associates - Webster, MA

Webster, Ma, Realtor

Hi Elizabeth. In Massachusetts we do title searches to find out if there any liens. They must be paid before the property is transferred to the new owner.

Apr 08, 2016 07:05 AM

Chris Ann Cleland

Long and Foster Real Estate - Gainesville, VA

Associate Broker, Bristow, VA

Do you get any buyers in Sacramento using FHA 203K Streamline loans to get all the improvement money in the purchase loan?

Apr 08, 2016 07:07 AM

Elizabeth Weintraub Sacramento Broker

Elizabeth Anne Weintraub, Broker - Sacramento, CA

Put 40 years of experience to work for you

Michael Jacobs Well, I knew recons involved a delay but I didn't realize how MUCH of a delay.

Bob "RealMan" Timm It wasn't just the cat scratched walls; it was also the cat clawed carpeting, the cat-chewed doors and let's not forget that lovely missed the litterbox mistakes.

Apr 08, 2016 07:33 AM

Bob "RealMan" Timm

Minot, ND

Tammy Lankford,

Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA

Broker GA Lake Sinclair/Eatonton/Milledgeville

I have never thought equity loans were a good idea. I'm a 20% down, first mortgage only kind of girl.

Apr 08, 2016 10:13 AM

Conrad Allen The problem here is not with a title search. The problem here is the owners just bought the house, and the previous reconveyances (from the previous sellers) were not yet recorded.

Chris Ann Cleland We do use 203K loans but even a 203K won't help after closing. It would need to be incorporated into the original pricing, and a HELOC after closing is a better deal.

Apr 08, 2016 10:41 AM

Tammy Lankford I am the same way. Actually, I pay cash for my projects but not everybody can afford that approach. For some, a HELOC is an affordable way to implement an improvement, then after a few years, they refinance the whole thing into a first mortgage with a 15-year amortization. Can't scoff at that. :)

Apr 08, 2016 10:44 AM

Joe Petrowsky

Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT

Your Mortgage Consultant for Life

Good morning Elizabeth. Having a HELOC can be a useful tool if it is used correctly, but many use it as a blank check and at some point is no longer a useful tool.

Apr 09, 2016 08:29 PM

A Surprise May Await a HELOC After Closing

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