2 questions on how to finance a 2nd property w/equity from existing home using a blanket mortgage?

1) I'm interested in learning the best way to purchase a second property, possibly at sheriff sale, using part of (40% ?) the equity in my primary residence (which I recently paid off) so I don't have to liquidate as much stock to "come up with cash up front"... & 2) If required to provide a certified bank check made out to Lehigh County, PA. (10% of purchase price w/ remander being applied to the balance) and I am outbid or choose not to buy the property, how do I return the funds to my account?

Public Comments

1. Vic the key is to ask the professional loaning you the money. You'll find most folks here will give you answer, but maybe they aren't a professional loan officer, like myself. It's not my ballywick! But most will solicit your business. I would caution you doing this in this market. Make sure you have done your homework on all aspects. The key here is your return on investment. Good Luck!
2. For starters paying the account off will not be a concern unless you are forced to do the certified funds thing. An equity check is a bank draft so the township where you are placing the bid may accept that. If you don't buy, the check is never cashed. If you do need a certified check and you decide against the purchase just return the check as a payment to the bank that holds your equity line. You will only be out the cost of the check and any interest that accrued on the equity line. If you take the money as a fixed rate - closed end second just be sure there is no prepay on the account. Many banks will do a second for no cost but will charge you the fees it cost them to do the loan if you close it out before the first 3-years. The cost is generally around $650. Find out what type of loan you qualify for if you purchase the property and at what LTV. You may qualify for up to 90% on an investment property. Don't use more of the equity line than you have to. The rate will be higher and possibly adjustable. On a closing note, if you haven't gotten your equity line yet, don't go to a mortgage company. Don't go to a guy like me. Go to your local bank or credit union. They are not looking to make money on writing the loan. We have to. Good luck - Get a lawyer
3. From a financing standpoint, a home equity line of credit would seem to be the best option. You will only pay interest on any amount which you actually spend. If you obtain the certified check and are outbid, you can simply deposit the check back into your account and pay off the line of credit. With regard to the type of sale you are attending, there are several issues which you should consider when purchasing at a Sheriff's sale. You will need to know the priority of the lien which is the basis for the sale. In other words, the sale may not produce clear title to the property. There may be other liens which you will need to pay off or otherwise settle. Also, the properties are usually sold, as is, where is. The sherriff makes no representations or warranties regarding the condition of the property or title. You will need to obtain a title report prior to attending the sale to ascertain the facts. If you are not sure how to interpret the information on the title report, you may want to retain an attorney. If you need further information, you can contact me at jdavis@ameristarmortgage.net.