financial "situation"

**big texas** · 12-08-2011, 05:22 PM

ok heres my situation and question..

property #1. owe 50k, worth 65. have a buyer wanting to owner finance and he puts 10k down in cash.

property #2. will close on it this month. putting 20% down. loan amount will be 80k. house worth 140 to 150.

on property #1. after his 10k down i will owe 40. i can come up with another 10k come income tax time. that brings it down to 30k

question = should i pull a 2nd mortgage on property #2 to pay off property #1 so all the payments will come straight to me.

??

how long does one have to wait to pull equity out of a house after u close on it?

**Greg** · 12-09-2011, 04:18 AM

The house you are buying is not worth 140 to 150. It is worth what you are paying for it. You are setting the new market value. Typically, when you finalize the purchase, this home now becomes the new "comp" that appraisers will use. So when you go for the second mortgage they will have an appraisal done and the recent purchase price of your house will be used to justify the second loan. So, unless property values are going up, you will not have any equity in your house to pull out.

**big texas** · 12-09-2011, 04:46 AM

interesting. i would assume that my 20% counts as equity. and what about the appraisal that i have from purchasing the house, that doesnt count for anything?

**CC Lifestyle Realty** · 12-09-2011, 12:39 PM

I think his point is your assuming your house is worth 140K-150K but claiming after a 20% down you only owe 80K. This means you are purchasing the home for $100K with 20% down. That home will be considered a comp and influence the appraised value on the next loan. The bank won't give you a second mortgage for more than the appraised value.

**Greg** · 12-09-2011, 12:56 PM

I'm pretty sure the bank won't give you a second for more than 75% of the appraised value, meaning if you only owe 50% of the appraised value they will give you a second for 25% of the appraised value. Talk to your lender.