QUOTE (holymoly @ Oct 14 2009, 01:03 PM) That site says, about a LOC: "it can be up to 75% or even 80% of the value of your property, behind a mortgage."
I`m a bit confused. Is this referring to the fact that you can get a secured LOC for up to that percentage of the value of your home? (I have one of these.) Yes, but deduct what you owe (mortgage)
At first I thought it meant that if you pay for a RE purchase using your LOC, the LOC can only fund 75-80% of the cost of the place you`re buying. But that`s not true, right? Am I right in thinking I can put 100% of the purchase on my LOC -- ie use the LOC for the deposit, downpayment and balance? I`m hoping/planning to use my LOC this way soon. I`m not sure if you can pay for a property in full with a LOC...I`d be interested to know the answer to that as well...but why would you?
By the way, thanks for the link.
I answered some of your questions in red.
If you can use your LOC to actually purchase a property in full, then your either sitting on alot of equity or the property your buying is inexpensive, compared to your LOC property.
When you have a LOC on a property, the max that lenders will give you is 80% of the value(unless you can find better). However, if you have a mortgage on the same property, they won`t give you 80% of the value...but rather, the difference between 80% of the value and what you owe.
So here`s an example. You have a property worth $100,000.00 and you have a mortgage of $50,000.00. The bank has put an 80% LOC on the property. You can access $100,000.00 x 80%= $80,000.00 - $50,000.00= $30,000.00.