Home equity loan

[Swamp Donkey]

I'm looking into getting a home equity loan real soon. I've built this house out of pocket and I own the land it sits on outright. I am now in a position where I need to move in the house very soon but I am out of money. My question is can I get a loan on my house without it being complete? By complete, I mean I need to finish the front porch and rails and a few misc things like landscaping bs. I need the loan for a aerobic septic system and to pay roughly 10k off in cc debt. So is is possible to ink up on a loan before the house is done?

[Gtracer]

Those unfinished factors may lower your overall value but as long as the house is in "Livable" condition for the appraiser you should be fine.

Livable-
Running water
Sewage
no missing walls/main supports
roof
4 walls and your good

[Swamp Donkey]

Those unfinished factors may lower your overall value but as long as the house is in "Livable" condition for the appraiser you should be fine.

Livable-
Running water
Sewage
no missing walls/main supports
roof
4 walls and your good

That's what I needed to hear. I'm not really concerned with the value that the appraiser establishes. The house should appraise for $65-70k pretty easily in the stage that it's in. And I can get up to 80% of the appraised value if I recall correctly. I don't need near that amount so I should be good.

What's an average home equity rate these days?

[jayjohnson600]

I recently got a re-fi offer at 3.875% fixed for 30years. Probably fee'd on the high side.

I also got a HELOC offer with advertised rate at 7.99%. I think that's just a flyer, and
too high.

If you are targeting a term longer than 5 years, I would opt for fixed.

Jay Johnson

[jewozzy]

That's what I needed to hear. I'm not really concerned with the value that the appraiser establishes. The house should appraise for $65-70k pretty easily in the stage that it's in. And I can get up to 80% of the appraised value if I recall correctly. I don't need near that amount so I should be good.

What's an average home equity rate these days?

I believe you have it backwards on the amount borrowed. I think you can only get 20% of value. Not 80%.

[Gtracer]

I believe you have it backwards on the amount borrowed. I think you can only get 20% of value. Not 80%.

You can borrow the full 80% as long as the house is paid for...

[Lone Sailor]

Get with SVT Lurch here on the board, he's the man when it comes to home loans and what you can and can't do. He'll steer you right.

[SVT Lurch]

I'm looking into getting a home equity loan real soon. I've built this house out of pocket and I own the land it sits on outright. I am now in a position where I need to move in the house very soon but I am out of money. My question is can I get a loan on my house without it being complete? By complete, I mean I need to finish the front porch and rails and a few misc things like landscaping bs. I need the loan for a aerobic septic system and to pay roughly 10k off in cc debt. So is is possible to ink up on a loan before the house is done?

Yes you can get a loan, but it may need to be a construction loan from a bank depending on what all is incomplete (which would be determined by an appraisal). If you intend to pay it off quickly you might be better off with a HELOC (home equity line of credit). You only pay for your outstanding balance, and the fees are less than a standard mortgage loan. If you'd like to PM me your area I can find a bank that is willing to do a HELOC there.

Those unfinished factors may lower your overall value but as long as the house is in "Livable" condition for the appraiser you should be fine.

Livable-
Running water
Sewage
no missing walls/main supports
roof
4 walls and your good

While those are the main concerns there is more to it these days which is why an appraisal is required.

That's what I needed to hear. I'm not really concerned with the value that the appraiser establishes. The house should appraise for $65-70k pretty easily in the stage that it's in. And I can get up to 80% of the appraised value if I recall correctly. I don't need near that amount so I should be good.

What's an average home equity rate these days?

Yes, Texas allows you to borrow 80% of the value of a home when taking cash out of the property.

Rates on an equity loan can be the same as a "normal" purchase money loan or as much as 0.750% higher depending on your credit score and the loan to value.

I recently got a re-fi offer at 3.875% fixed for 30years. Probably fee'd on the high side.

I also got a HELOC offer with advertised rate at 7.99%. I think that's just a flyer, and
too high.

If you are targeting a term longer than 5 years, I would opt for fixed.

Jay Johnson

The rates on HELOCs are typically higher (and variable), but you only pay for what you borrow and with the cheaper fees it actually might be a better deal in his case.

I believe you have it backwards on the amount borrowed. I think you can only get 20% of value. Not 80%.

No, you have it backwards, he is correct.

You can borrow the full 80% as long as the house is paid for...

You can borrow a maxmum of 80% of the value on an equity (cash out) loan in Texas regardless of it being owned free and clear.

Get with SVT Lurch here on the board, he's the man when it comes to home loans and what you can and can't do. He'll steer you right.

Thanks Scott!

[Saleen781]

SVT Lurch has it correct. You're better off with a Const loan or HELOC. If you do not have a septic system installed already you may run into some issues with a HELOC but a const loan will have more flexibility on "finishing" the project. My parents installed the aerobic system and it's pretty cool, they can piss, shit and water the yard with it!

[jewozzy]

Oh my bad I must've been thinking you have to have at least 20% paid off.

[Swamp Donkey]

Yes you can get a loan, but it may need to be a construction loan from a bank depending on what all is incomplete (which would be determined by an appraisal). If you intend to pay it off quickly you might be better off with a HELOC (home equity line of credit). You only pay for your outstanding balance, and the fees are less than a standard mortgage loan. If you'd like to PM me your area I can find a bank that is willing to do a HELOC there.


While those are the main concerns there is more to it these days which is why an appraisal is required.

Yes, Texas allows you to borrow 80% of the value of a home when taking cash out of the property.

Rates on an equity loan can be the same as a "normal" purchase money loan or as much as 0.750% higher depending on your credit score and the loan to value.


The rates on HELOCs are typically higher (and variable), but you only pay for what you borrow and with the cheaper fees it actually might be a better deal in his case.

No, you have it backwards, he is correct.
You can borrow a maxmum of 80% of the value on an equity (cash out) loan in Texas regardless of it being owned free and clear.


Thanks Scott!

Thanks for all the info. I might hit you up with a PM in a few. I did hear (rumor of course) that banks won't consider a const loan once ground has been broken?? HELOC might just be the best option. I only need about 15k to wrap it up.

[Saleen781]

most institutions have a $25k min for a loan against your home...just FYI. I don't think that has changed but I may be wrong.

[Real Estate Nate]

Yes you can get a loan, but it may need to be a construction loan from a bank depending on what all is incomplete (which would be determined by an appraisal). If you intend to pay it off quickly you might be better off with a HELOC (home equity line of credit). You only pay for your outstanding balance, and the fees are less than a standard mortgage loan. If you'd like to PM me your area I can find a bank that is willing to do a HELOC there.


While those are the main concerns there is more to it these days which is why an appraisal is required.

Yes, Texas allows you to borrow 80% of the value of a home when taking cash out of the property.

Rates on an equity loan can be the same as a "normal" purchase money loan or as much as 0.750% higher depending on your credit score and the loan to value.


The rates on HELOCs are typically higher (and variable), but you only pay for what you borrow and with the cheaper fees it actually might be a better deal in his case.

No, you have it backwards, he is correct.
You can borrow a maxmum of 80% of the value on an equity (cash out) loan in Texas regardless of it being owned free and clear.


Thanks Scott!

...and there you have it!

[SVT Lurch]

Oh my bad I must've been thinking you have to have at least 20% paid off.

No worries, just wanted to make sure it was clear.

Thanks for all the info. I might hit you up with a PM in a few. I did hear (rumor of course) that banks won't consider a const loan once ground has been broken?? HELOC might just be the best option. I only need about 15k to wrap it up.

They don't like to, but it can be done. Most banks want relationships now so if you're willing to move some funds over to them (and keep them there after you get the loan) lots of things are possible.

...and there you have it!

Thanks Nate!

[Swamp Donkey]

most institutions have a $25k min for a loan against your home...just FYI. I don't think that has changed but I may be wrong.

That would be fine as well. I'm going to toss the remaining funds back on principal anyway. I plan on paying the loan off within 5 years max.