Easy Home Equity Loan

I am considering having my brother help out with the downpayment on a house that I will live in and solely own. His share would be ,000. In return he will receive a yearly rate of return on his investment, with a payout at the end of the 10th year. I am guessing that a 10% annual interest rate would be attractive given the state of the stock market.

This deal would be on the side and under the table so as not to create a Mortgage 2 on the property.

Is the interest rate that I described acceptable…too much…too little?

Here is an example that I’ve worked out:

Purchase Price: 8,000

Down payment: 00

In 10 years: Market value (2% per year incr.) 1,176
Mortgage Balance: ,274
Equity: ,902

Payout of ,000 loan at 10% over 10 years = ,937

Therefore, Remaining equity would be ,965.

I would be personally responsible for all of the mortgage P&I, taxes, upkeep etc. while I live in the property as the owner.

Over 10 years: My current rent that I pay now would be: (0 x 120mths)= 2,000
Over 10 years: The mortgage P&I + property taxes (estimated) (1 x 120mths)=0,920

So at the end of ten years, I will have paid out much the same, however…with the home ownership, I will surely have paid additional for upkeep/maintenance. However, I would also now have accumulated ,965 in equity even after paying off my brother.

Does this make sense….am I missing something?

If anyone has any advice, I would really appreciate it!

Thanks,

I will use 00 for downpayment and the rest to go to closing costs.

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In my recent divorce, I was assigned 10K in credit card debt that is in my ex-husband’s name at 22% interest. I want to pay this off as the monthly finance fees are almost 200$ alone. I don’t have the ready cash to pay it off, I used the loan maximum in my 401K last year to purchase a house and I don’t currently qualify for a new account to transfer this loan to a better rate. As I recently purchased my house, a home equity loan is not an option either.

I have the money in my 401K but know that there are tax consequences of taking this money out. My 401K in the current market has earned me -13.5% for the year and I’m paying 22% on this credit card. Even with the loss of dollar cost averaging blah, blah, blah would it make more financial sense to transfer the money from the 401K to the credit card?

I’m in my mid-30s so have time to recover and also my employer contribution is not a match but a straight 10% of salary deposited so that will continue while I work here
Thank you for the comments so far.

I’m actually considering a withdrawal, not a loan and as I understand it you can withdraw for any reason as long as you pay the taxes and penalty or pay it back by a certain time.

So I’m trying to figure out if I would lose less money paying 22% for the next 10 years on this credit card or less taking it from the 401K.

I’m also fully vested in a retirement pension.

I’ve tried to have the interest rate lowered but they won’t talk to me since its not in my name. I have to forward a letter with the court agreement and its hard to negotiate that way ya know? He could call and ask but he won’t.

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I’m buying an existing home. I can afford to put 10% down. My company is going to pay 3 pts. to buy down the interest rate as part of the relocation package I’ve received. If I plan on staying in the home for 5 to 10 years, which way can I maximize my equity, while minimizing my monthly payments? Is a 30 year fixed going to help me get past paying PMI more quickly than the interest only loan? Is the paying the monthly savings toward the principal of the interest only loan the best way to go?

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I called Quick Loans to get some extra cash.I am a home owner with equity and right now my loan with my bank that I have is 5.87 interest 30 year fixed.I have 4,000 debt 2 are high interest credit cards the rest are hospital and doctor bills.My credit score is not that great but have kept payments up on mortgage.I wanted 20,000
cash out for a loan .They offered me 133,800 fixed paying only interest for 10 years.They gave me a 6% fixed rate paying off all debts and the rest of the 20,000 to invest and possibly make a profit.My mortgage payment now is 790.00 a month paying principle and interest .The new pay debt would be 878.00 per month paying interest only for 10 years.They also want a good faith deposit of
500.00 and will go towards the loan.This would make my credit slate clean.Should I do this?

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I have a fixed mortgage at 6.5% but my home equity loan just dropped down to 4%. Would it be legal to pay off my entire mortgage using my home equity line of credit? Refinancing wouldn’t do me any good since no one can match the 4% rate. I just want to make sure something like this is allowed and doesn’t run afoul of some federal law or banking rule.

Also, are there any cons to doing this? I’m 10 years into a 30-year fixed.

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Since the rates are low we would like to refinance our home. We have owned the home home for 10 years. We would like to put some money down,get a lower interest rate, and change the term to 10 years. When I called the bank the person recommended a Home Equity Loan since we don’t have to pay for the processing like we would a mortgage. He also said since the amount was less than 0,000. Does anyone know about this? I have asked around but I think people get confused with a HELOC. Thanks.
Thanks livein md. Are current rate is 6.75% and the one we were looking at would be 4.5%. We are thinking of putting some money down. So it would not be not more than ,000. Thanks.

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I got accepted to graduate school in a different state and my wife, daughter and I need to move this summer to that state. I have a house now that I own and I am planning on selling this one and buying a home in the new state where I will be going to school. My question is this, I am a full time student and my wife works full time. When we move to the new state, my wife will become a full time stay at home mom and I am going to be going to graduate school full time so I probably will only be able to have a part time job. We have enough equity in our current home to put a nice size down payment for the new home but I don’t know how to go about selling this home and buying the new one. If I’m not mistaken, I will need to show the loan officers in the new state that I have a job but I will only have a part time job because I will have tuition reimbursement and housing assistance from the school.

So, how do I go about selling this home here, and then buying a home there and getting the lowest interest rate possible there. Both my wife and I have very good credit scores so I know that will help because neither of us has ever defaulted on a loan in the 10 years we have both had credit. Can I buy a home in the new state with my equity from this house and not have a time where we wouldn’t be living in either house. I don’t want to have to move twice because of selling our home, then living somewhere and then moving into the new house. Anyone have suggestions?

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I owe about 20k in credit card debt,
8k of that is at 2.9% or 3.9% til paid off!
The rest is at 0% til April ’08.
By then I’ll get more offers for new cards, with bal. transfers free, and often 18 months at 0%
I could keep moving the balances and not worry, since I’ve done this for years and it doesn’t seem to have affected credit score enough to matter.
I know there are tax advantages for home equity loans, and I
could easily get one, but is it worth paying 7+%?
Is there a math calculation to figure this out?
Another factor: I’ll probably sell the house within 10 years and pay everything off.
A complete cash out refi. doesn’t look good because my mortgage is at 5.38% and would surely go up to at least 6%

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