Thread: How to buy house when you need down payment

My wife and I have lived in our home for about six years and decided to move. We owe 70k on the house and it is worth about 170k. Is it best to sell the house first and rent while we are looking or should we get a home equity loan and use the cash as a down payment. Is there another way that we are missing? I need to wait about 1 year before we move because that is when my pay will double. Any ideas appreciated.

Well most sellers these days don't like to take a contract contingent on you selling your current home, however I guess most areas are more of a buyers market right now and this may not be an issue.

That said I personally would likely go with the line of credit idea or maybe make sure my home was sold 1st so I wouldn't be carrying 2 homes.

Home-Equity-Lines-Of Credit rates have certainly gone up ove the last couple years, however they are most often free to open and do not have any closing costs. So if you only used it for a short period of time it would be great for you.

Hey upsguy,

With that kind of equity just sitting is a tragedy. If your going to keep that house just for another year, Then you cant be concerned about it
appreciating any savings. Now is the time to determin your one year
goal.

Maybe a Cash out refi will give you the down payment you need in a year.
A comfortable payment because interest rates are still at record lows.
Money in the bank earning interest.
And rehab anything that needs to be fixed, So when you sell you wont have any issues with the house it will show well. (Buyers can be picky).

Just Brain storming! I think you have lots of options, Make sure you pick the right one.

You do not need a downpayment if you use 100% financing.

You should probably speak with a mortgage broker and financial planner before making any decisions.

Robert Greco
up4salehomes. com