House buying question...

My DH and I want to buy a house. Now we're really looking for a type of house that when we buy it, it will appraise for more than what we paid for it, so we can take out an Equity loan to pay off our credit cards. For those with experience, is there anything that we can look for in a house that would have a good chance of that happening?

We REALLY need to pay off the credit cards. Is there anything else we can do to get a loan to pay off the credit cards once we buy a house? Using the house as collateral???

Thanks!

Re: House buying question...

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Posted by Melissa

My DH and I want to buy a house. Now we're really looking for a type of house that when we buy it, it will appraise for more than what we paid for it, so we can take out an Equity loan to pay off our credit cards. For those with experience, is there anything that we can look for in a house that would have a good chance of that happening?

We REALLY need to pay off the credit cards. Is there anything else we can do to get a loan to pay off the credit cards once we buy a house? Using the house as collateral???

Thanks!

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We'd all like our houses to appraise for more than what we paid! We just had our condo appraised, and it was for exactly what we paid. They look at what others in the area of the same size/condition go for, and appraise based on that. So, unless you get someone who has to move very quickly and is willing to sell for less than the going rate, you are probably going to appraise for about what you paid.

Re: House buying question...

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Posted by Melissa

My DH and I want to buy a house. Now we're really looking for a type of house that when we buy it, it will appraise for more than what we paid for it, so we can take out an Equity loan to pay off our credit cards. For those with experience, is there anything that we can look for in a house that would have a good chance of that happening?

We REALLY need to pay off the credit cards. Is there anything else we can do to get a loan to pay off the credit cards once we buy a house? Using the house as collateral???

Thanks!

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You want a house to appraise for more than the price you are buying? Move out of state then. And no I am not joking. You will most likely have enough trouble getting the house to at least appraise at the purchase price... nevermind over it.

If you are so intent on paying off the credit cards when you are buying the house... look for a negative points loan. Its a loan that will give you a higher interest rate than the national average... but it will give you cash at closing that you can use to do whatever you want (pay closing costs / pay other debt / etc.).

You can always refi down the road. But you won't be able to take out an equity loan like you described above without having at least 20% equity in the house already.

Re: House buying question...

Also... if your credit cards are excessive... you should put the house on hold. Lenders are going to frown on this kind of debt (assuming its large). And even if they do offer you the mortgage... that doesn't mean that payments would be comfortable.

The wise thing to do would be to pay down your debt now... or get it at least under control... then look for the house when you are in better financial position.

Re: House buying question...

Thanks for the info...

We already live in North Carolina!

We've also already been approved for a loan. I'm not thrilled with the payments. But with our credit and no money down, it's not too bad! And if we're able to pay off the credit cards at least some of it, then in a year we can refinance our rate. I don't know... I just wish I knew what our options were before we purchase a house?