Equity Loan Information

Will taking out a home equity loan make it hard if I want to sell and buy a house?

I need to take out a loan (and consolidate) to pay bills that have higher interest rates. But what if I want to move before i have finished paying the loan off? How will that affect mortgage applications, etc.?

Public Comments

1. Before you accept a contract on your house, be sure that the Offer is high enough to pay off your current mortgage and the home equity. If not, you'll have to pay the difference at closing, because the home equity ends with the sale of the house.
2. As with all things it depends. It depends on your income, debt load, credit history etc. On the face of it, what you described should raise your FICO score (paying off bills early) and lowering your monthly outlay. If you are looking to buy another home in the very near future it could work against you. If you are looking out 6 months or more and DON'T run your credit cards up again you should be good. Good luck
3. Hopefully you have enough equity to not have to worry. Your sales price has to cover the mortgage and the HEL. Shouldn't affect the new application. Hopefully the appreciation in your current house will cover you.
4. If you want to sell your house the new owners will get their own financing so the loan will be paid off through escrow. If you are buying another home you are not taking the loan with you so it is not a problem as long as the lenders on the new house know you are not going to keep your present property. However, if you put your house on the market and then try to get a loan no one will finance you. Everything seems so simple until you start to do it so if you need someone to walk you through the steps or get information send me an email. There is no cost or obligation.