Equity Loan or Conventional? What type of loan should I get?
Wednesday, 1. September 2010
I have about 20K in I-Bonds (face value). I am going to purchase a 2nd home as a rental property; same town. The rental is K.
The house I live in is worth about 0K and I owe about K on it. I have been qualified under both equity and conventional and on the 5-1 arm as well. I have excellent credit 750′s but due to the property I want to purchase being a rental, the interest rates I am getting are very high. 8.93 on the equity with nothing down and 5.1 with 20%down on the conventional. The 5/1 Arm gives me hives so I am kinda staying away from that one. What do you all recommend. I really did not want to part with the I-Bonds. They have not yet matured and I kinda wanted to use them for my kids first year of college in 5 years but the 2nd house is to help me pay for their college as well. I will be done with my 1st house in 4 1/2 years. What do you suggest.
Shawnta M Says:
Since you really do not want to use the Bonds, you could refinance your first primary residence to take the 20K out to use towards purchasing the investment property.
You could possibly take out a loan against the stocks. 20% of the investment property is only $12,400.
Noneya Says:
I would do a cash out refinance of your current mortgage and just pay cash for the investment property.