Once I purchase a house, How soon may I access the equity with a heloc or 2nd mortgage?
Answers:
Depends on your equity.
Many factors influence the answer to this question: your credit score, the amount of the equity, the purpose of the cash out, etc. There are lenders who will refinance one day after the original loan is closed, but not many.
Your best bet is to wait at least 12 months before trying to pull out any equity. This helps to establish seasoning and mortgage history.
Good luck! :)
After 1 year of ownership, you may use an appraisal value rather than the purchase price to establish the value.
Then you may borrow additional funds.
Normal industry standard is 6 months on title to refinance with a benefit to the borrower. 12 months to access the equity in your property via Equity Lines, 2nd mortgages and Refinance with Cash out
It's a question of both time, property value, and credit profile.
With the recent changes in the market, and the disappearance of subprime lenders like New Century, the odds are slim that you will be able to do anything less than 12 months out. That timeframe is mitigated by the Loan-to-Value ration (how much you're borrowing in total vs the market value of the property. The most important issues will be your credit scores, debt ratios (what you owe vs what you make). So get your credit account balances low (not necessarily paid off), and pay the mortgage on time. The rest will take care of itself. Put away some savings-especially now, the banks want to see reserves tucked away.
I can do an equity loan at the same time of closing, or immediatey after using the appraised value even if it is higher than the purchase price. I recommend contacting a mortgage broker in your area who can shop your needs through several different lenders.
Of course your credit history, equity, and ability to repay will all be taken into considation as well.
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