Buying with a Credit Card

[Kathryn K.]

Like many folks, I am currently having a hard time financing the purchase of investment properties, even with hard money lenders. I have excellent credit. (790) But I have little cash reserves and a high debt to income ratio (until my vacation property sells) I am lookign to purchase a condo at a rock bottom price (50K) and what with the high cost of points and all with a hard money lender, it occurred to me to just buy it on credit cards, as I have the available credit limit, but I would like to rent and refi to pay back the credit cards asap. Is it possible to take a loan against the property to pay off the credit cards? Has anyone done this?

[Richard Warren]

Is it possible? Yes, but…

If you max out your credit cards you will see your credit score drop. That’s the first negative.

You can refinance the property but you will find that you can only get about 70% of what you paid for it, not the actual value. If you don’t have cash you will not be able to fully pay off the card. Before doing anything like this you should explore your financing options with a good mortgage broker.

:cool: