I was just looking at my MBNA credit card statements and then went into look at other types of cards that they offer. I seen that some of the business cards offer real high credit limits. What im wondering is… How many second mortgages can you have under your name?
What im getting at here is if i can get a card with a60-70k limit and just buy the house initially on the card, put the property into my name and then take out a 2nd mortgage or home equity loan to pay the credit card off.
The reason im asking is, I usually have little to none to put down on a house plus paying the outrageous closing costs on a house. i come acrossed rehab homes that can make a bunch of money either reselling the house or using it as a rental. Ive lost about 3 great propertys that could have been worth maybe 40K profit so far this year trying to get financing and by the time i have it figured out, it is sold.
If anybody has done something similar to this, thinks it will work, wont work, or whatever; please let me know thoughts and reasonings.
Sounds like a reasonable idea and just to let you know, if you can take a 2nd out on a current mortgage something just implemented recently…A Chase Equiline Platinum Visa with no annual fee. You utilize your line as easily as swiping a credit card, without the outlandish 12% APR rates that are out there right now.
i guess what im wondering here is, do i have to have a first mortgage to take out a second mortgage? I dont really know how all this works, but technically from a banks stand point, the house is paid in full, and i am just using the equity. So do i take out a second mortgage, or do i do a home equity loan? If i can do either or, what has better interest rates? Closing costs? ect.
Thanks everybody, im becoming very knowledgeable from all the input and advice that ive read, and been giving!!!
well in regards to getting a 2nd mortgage, you have to have a 1st before you can get a 2nd…(Kindgergarten 101…LOL)
You could refi to 90% LTV (no seasoning) and at the same time add a HELOC…, and use the equity you have in a property as collateral, this would give you additional cashflow to purchase more properties or whatever you would want…(well earned vacation)
In regards to what zachj said about a Equiline Visa Platinum…please share the info…I had not heard of this.
What is the interest rate on a heloc usually. I really dont think i will need to go this far to do this kind of thing as i should be able to have the house sold by the time i need to get the house out of the credit card. It is at 2.9% until April. But i will have up to $10,000 more on credit cards after the rehab is all said and done. But i need to have something lined up just in case. Might possibly be a rental house.
Ok, if you can qualify for a 60-70K business credit card, you’re better off going to the bank and doing an interest only commercial credit line. Your rate will be much better and doesn’t compound monthly like the credit card does. A business credit card is typically going to have a much higher rate than a normal personal card.
I would recommend doing an 80/20 investment purchase and do the rehab on the credit card as needed rather than the other way around.
first Horizon has a great 80/20 investment program. You pay the closing costs and the rest is financed.
Aurora Loan Services also offers an 80/20 investment program, but the rates a bit higher.
By using the credit cards for the rehab, you can control the amount of interest you pay out by staggering the materials over the time it takes to rehab rather than having all of it accruing interest while rehabing.
I bought my rental property on credit cards. I kept offers from my cards and used the checks to buy the house. I then had it appraised at 11k over the purches price and got a flex saver arm line of credit that is good for 10 years. The loan was no cost and I am allowed to make intrest only payments if something were to happen.I got a rate of 5.75 plus prime.I am about to buy my second rental the same way.