All that being said, I don’t see the problem with using your primary residence as collateral.

Sometimes in makes sense just to cross collateralize the property to leverage your equity for use on another deal.

But she will have to execute the mortgage for you to use homestead property as collateral for a loan.I am a Florida based lender, and have been originating residential loans for 30+ years.

If you do, you can use the equity in that property as collateral and open up a HELOC (assuming you have equity of course.) 

I mean, the whole thing with a mortgage is its collateralized and MOST people shouldn't have the kind of cash at once it takes to buy a house without actually having that house as collateral.

Eric,Start making offers in Chicago that pledge your collateral un MN.

The lenders that issue these loans are aware that clients put up no collateral or down payment, which makes the loans riskier for them.

well what I would do is tell the seller the house needs 45k.. and since he holds the first you are improving his collateral therefore its safe for him to take a smaller down payment.Maybe offer to escrow the rehab funds so that if you say your going to rehab but don't he can go in and grab his 25k that is not coming to him in the form of down paymentlet him be in control of that 25k in some manner.. that may work.Its just like when I tie up development ground if I have a very cautious seller..

The bank had reservations about my using all my cash for the DP and offered me 100% financing, however, I would have to use my investment property as additional collateral. 

@Hudson WalkerAny sort of lender is normally going to want the home as collateral to lend you money.