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 Home Equity Loan

Home Equity Loan Creative Real Estate Financing Technique #7

Home equity loan, a good source for capital to help a new investor begin can be found in the investor's own home or investment property. Many lending institutions make loans secured by the equity in your home or other properties, usually for about 75% of their value. If you look for special offers, you can get as much as 80% to 85%. The interest rate is usually tied to the prime rate: for example, prime rate plus 1% or 2%.

The payoff period, or time in which the investor is required to repay the loan, is 5 to 15 years, depending upon the lending institution. Most institutions do not charge any points (the percentage of the loan that the borrower must pay to the bank) for making the loan. In addition, the origination costs of the loan are very small.

Specific Situations to Apply Technique #7

Home equity loan  

The Property


The Buyer

No Cash at All

Equity in Real or Personal Property

Dead Equity


The Seller

Needs All Cash for Equity

Home Equity Loan To Private Mortgage