Collateral Loans: Good or Bad?

[Woody Brenton]

Hello BP Community

I own a home in the Seattle area, and it rents at market rate with no mortgage. Because I don't have a mortgage and not amazing credit I don't look great for a traditional mortgage through a bank. 

I would like to purchase a primary residence in Los Angeles, and I'm considering either selling the Seattle home when the lease is up in a year, OR using the Seattle home as collateral to get a loan on a house in LA. The house in LA would be of significantly less value than the Seattle home. 

Any thoughts on the matter? 

Are Collateral loans evil? 

Would they give me one? 

If so, who might "they" be?

Thanks, 

Woody