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from Local Attorney, Michael H. Wasserman

Wednesday, February 6, 2008

More on HELOCS

Never mind that the lender might send a letter telling you that the size of your line of credit is going to be lowered, if you are even remotely considering a sale of your home and purchase of another, NOW might be the time that WANT/NEED to get that HELOC anyway.

With a slow market, there is just no guaranty that you are going to be able to sell your home in time to buy the next one. You might be able to offer to buy the next house contingent on the sale of yours, but there is no guaranty that the seller will agree, or that you will find a buyer who can fulfill the contract to buy yours. Mortgage markets are tightening for everyone.

You may need to tap into that built-up equity in your current home before you sell it, in order to buy the new one.

THE PROBLEM: Most mortgage lenders will not want to remortgage your house for you once you have listing on the MLS. As suggested by Dan Green at Mobium Mortgage, "If there's even a remote chance that you'll need your home's equity for a downpayment on your next home, it's just good defense to get that equity out today -- before you list your home for sale".