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post #1 of 8 (permalink) Old 02-07-2007, 12:58 AM Thread Starter
 
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Honest Question.

So I am getting pre aproved for a home loan. I was aproved for a little over 100 grand. Now alot of homes I am looking at are around 85-90 thousand. Is there realy anything wrong with me getting some extra cash for my sweet baby in the garage?
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post #2 of 8 (permalink) Old 02-07-2007, 03:02 AM
 
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i would say i need to move to where you are but nm your in cheese country...

on topic

I don't think they will give you the difference only a check for what you buy for, and speaking from experience, you want to pay as little per month as possible to provide for your hobbies.. I.E mods
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post #3 of 8 (permalink) Old 02-07-2007, 04:40 AM
 
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Quote:
Originally Posted by Wangan_X View Post
I don't think they will give you the difference only a check for what you buy for, and speaking from experience, you want to pay as little per month as possible to provide for your hobbies.. I.E mods

It's not a good move to borrow money for 30 years for something you might not even own in four or five years (like a car).
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post #4 of 8 (permalink) Old 02-07-2007, 06:38 AM
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Garage
It depends on how much cash you are looking to borrow. You stated "some" cash. If you are looking to take money out to purchase the car. I agree with Keg, you don't want to go in debt for 30 years on a car. How long of a mortgage are you looking at? This could play a factor in how much you can afford per month. If you are looking for a few grand for mods or something, the payback over the long stretch won't be too bad.

Check with your lender about a home equity, or personal line of credit. On a personal line of credit you'll have fluctuating interest, there will be a minimum of the interest due each month and you can pay as much as you want on the principal and you can convert this to a fixed rate at anytime. If you go this route you have to be disciplined about paying as much as you can on the loan. Beware if the feds up the rate, your rate will go up as well.

What is good about this is, you can take out a % of the equity in the home. In your case you won't have much equity cause the loan is new. The idea is take out as much as they allow you. You pay nothing on this unless you use it. It can sit in the account. Say you take out Line of Credit for 50 K. 2 months down the road you want to purchase something, you right a check out of the account. Every time you make a payment it builds that account back up to the original amount. Whether it be mods for the car, a car itself, or anything else. You can claim this in income tax. If you are not careful the interest on this can nail ya. You will always have money in an account for you in case of emergency's. This is a good idea for the unexpected expenses that creep up. Many institutions will not charge fees to open an account.

The Home Equity Loan, is like a second mortgage. A fixed rate and on a payment plan. Once the loan is paid off its done. Most of the time there are fees associated with this, closing costs etc. This too can be claimed on income tax.

Again, you said some money. Not sure of the amount you are seeking. If you are looking for a sizable amount, check with the loan institution to see what kind of deals they have for a rider on the original loan. I'd refrain from adding a lot of money on top of the mortgage, you'll want this on the side so you can pay it off. The amount of interest will play a role on how much you seek to borrow.

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post #5 of 8 (permalink) Old 02-07-2007, 06:51 AM
 
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They still have House's that cheap ?
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post #6 of 8 (permalink) Old 02-07-2007, 05:24 PM
 
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Pre Approved means that you can afford a house up to that amount of money. This is a good thing to find out before you go looking for a house, that way you aren't looking at 125,000 houses when you can afford a 100,000 one.

Just because you are pre approved doesn't mean they are going to give you that much. What should happen is, you select the house you like, determine the value of the house by looking at comprables, then put in an offer for less. Most banks, if you don't have 20% down will require you to get mortgage insurance. They will count the value of the house from the appraisal, so you might be able to get away with less down. For example, when I bought my house last year, they were asking 255,000. It's a new plan and the Comps were at 280,000. I assumed they didn't know what the house was worth because they were asking so far below market. I offered 230,000 as a firm offer, meaning no haggle. They accepted. My appraisal came back at a nice 293,000 amount. That means at 230,000 I have 63,000 in equity or 25% and could have qualified for not having any money down and no mortgage insurance, or taken a loan for 293,000 and gotten a check for 63,000 at closing. They sold this house on a by owner basis trying to save money, but any good real estate agent would have easily gotten them another $50,000. They did ok though, they bought the house preconstruction for 205,000 so in 9 months they made 25,000.

Get yourself a good buyers agent, or if you are signed on with an agent make sure they are not also working for the seller. Look at lots of houses, make the agent work and show you at least 20 houses before you go ok I want to look at these 3-4 houses.

A good website to find out what the house you are looking at is worth is www.zilow.com.

Good luck!!! Buying A house is a poor investment compared to the stock market, but it's a safe investment, and you'll almost never lose.
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post #7 of 8 (permalink) Old 02-07-2007, 09:39 PM
 
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A traditional mortgage lender in a conventional mortgage will lend up to x % of the purchase price or appraised value whichever is lower, nothing more. After you buy the home, you may be qualifed to borrow the rest in a 2nd DOT Line of credit.

Good luck.
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post #8 of 8 (permalink) Old 02-07-2007, 10:51 PM Thread Starter
 
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Thanks for the answers fellers.
Just got back from the bank. We went over some options. I was hoping for about five grand for a S/C. But like it's said im pretty sure you can only borrow for the price of the house and closing costs.
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