I read my HELOC agreement today and it specifically says that Lender have the right to cancel my line of credit if I move out of my personal residence and demand full payment.
I found this perfect Fixer which I want to remodel, move in and have the existing residence (the one with the HELOC) rented.
The HELOC was obtained in February 2006 for $450K line when the home values where at its peak. It survived the freeze issued in early 2008 and it is still available now.
I was planning to buy this Fixer house with 50% of my HELOC and 50% of Hard Money Loan. I don’t qualify anymore with regular conventional financing because I have 7 financed properties now. This will be the 8th.
My fico score stands at 784 so I am an excellent borrower.
I had the HELOC bank statements moved to my P.O. box at least a year ago. Even if I move nothing will change.
My question to you is, Do you think Lender will find out if I move out and recall my HELOC? Need your opinions, thanks.
If you have to ask, you know what you’re doing is wrong. It’s been posted here before that you burn bridges and get a bad reputation if you knowingly do shady business.
if it says in your paperwork that they can call the note due and payable why would you risk it? Be honest with them and see what they say, but keeping it from them will only make you look more guilty if they find out.
There was no intent to do shady business. It just so happened I can not buy anymore because of the 4 property Fannie mae limit rule. Of course I will still continue sending my payments (I have a lot of equity left on the house) and Lender will still be in business with me.
Is it not banks are in the business of lending? If I continue sending my payments would they not want to keep me as their few remaining clients who did not bail out? What about those who purchase their homes as owner occupied, and then have it rented a few years after? Just asking…
Banks have been calling HELOCs for a while now due to the economic situation involving real estate and banking. You are fortunate they have not pulled you line and I doubt it would be a good idea to raise a red flag.
On the other hand, it’s pretty hard to believe that they would knwo that you bought another property and that your current property was no longer owner occupied.
I have all my mail sent to a PO Box and have done that for years so the bank would not know if I moved or not unless I told them based upon my mailing address… I doubt they would know and surely would not look unless you defaulted on some payments.
Harding,
To answer your question…
I don’t know if the bank still wants your business. I think they care more about there bottom line than you as a customer. My point was if it is in your paperwork that they can call the note due and payable why would you risk it? You are the one who agreed to the condition when you signed the paperwork, but now you want to insinuate that the bank is unfair…
To answer your question regarding borrowers who rent out their current residences…
New guidelines have been instituted that if you want to rent out your current home when buying a new home you will need to have a MINIMUM of 30% equity in the property VERIFIED by the new lender as well as six months of reserves for BOTH properties.
p.s. The 4 property minimum does not include primary residences. So IF you can qualify for the new property and can meet the above guideline you very well could qualify for conventional financing.
Hope this helps.