Getting started lending questions.

[Ian Hutton]

Hey everyone first time with everything! Lol I’m looking into lending options for my situation, but I’m confused on we’re to start. 

I’m lookin into houses at are 175k and below however for a down payment I was planning on using a cash out refi for the Down payment/ unexpected costs. since my home has appreciated 100k I figured this would be a good place to start. 

I’m trying to get in touch with lenders to get prequalified on the home, but we’re I’m confused is. 

Does the lender need to qualify me for a 175k home in total or just 140k since 175-35downpayment = 140

Lol anyways I’ve been reaching out to a few lenders but am generally confused on what’s the best way to get started for me. 

Thank you in advance love this group! 

[Edwin Epperson]

@Ian Hutton, it sounds to me like you actually have two scenarios going on here for requesting lending. Scenario A - you have a personal residence that has equity, approximately $100K. Scenario B - you are looking to purchase an investment property for up to $175K. As I understand it you're wanting to "free up" equity by getting a 2nd home loan or a HELOC, correct? If so that lender will most likely be an institutional lender, ie Bank or Credit Union. That equity loan (2nd position) will heavily be determined based on personal DTI, and credit score, tax returns for the past two years, and income verification. You will not find to many non-institutional lenders willing to place a 2nd on a primary residence. I also assume that without the freed up equity you would not have the cash to purchase the investment property listed in scenario B correct? If this is the cash, you may want to continue to store away capital for the acquisition of an investment property. I could go into more detail but honestly I would not have the time to type it all out LOL! If you interested happy to have a call and help you strategize your options. Best wishes and much success!