The Purchase and Cashout Question

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Margaret

Joined: 13 Nov 2009
Margaret's page
Posts: 78

-146 Magic Points

Subject: The Purchase and Cashout Question

Mon Nov 16, 2009 4:04 pm

I need to get a loan large enough to purchase a house and consolidate credit card debt at the same time and with little down payment. Friends have told me they have purchased homes in this same manner...sometimes with no down payment... I've never purchased a home before and therefore am clueless ...how does this work?? I know there must be "penalty fees" involved for not having a sufficient amount of down payment.

fireyone

Joined: 26 Feb 2008
fireyone's page
Posts: 4285

127 Magic Points

Mon Nov 16, 2009 4:09 pm

How did your friends say they got their loans? The only way I believe this type of loan could happen is if you were to purchase a home for , lets say, $25000 but the value of the home was much more, lets say $50000. Well maybe then you could use some of the homes equity to consolidate credit card debt. Just relize by doing this you are really dragging out the debt and will be paying much more on it.
Most banks have a percentage of how much of the homes value they will actually lend. We took out o loan a few years ago and at that time the bank would give 90% of the value in a loan. (of course this was a home equity).

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