We have a ton of equity in primary house. How do we access that equity as a down payment on a new home in order to avoid a contingency offer on new home?
Thanks!

I'm not a professional, but I don't see how a home equity loan isn't your best bet, the equity loan takes a 2nd lien position, both primary and second liens get paid off at closing when you sell your place.

In reply to 380Ag Not sure where you're located but I'd be happy to discuss the options for a no cost home equity line to access the equity up to the limit allowed by law. Very rarely is there any cost to a borrower. Email on profile.

Rate for the first year is 6.99%. Sounds like in your case you would need these funds only for a short time so the amount of interest wouldn't be great. The payback is interest only for the first 10 years for those needing the credit longer term.

Echoing what others have said - use a HELOC. Can be closed quickly (14-21 days in some cases…). It is a second lien. No immediate need to withdrawal on it if you don't need to. Allows you to go make the offer on the home (assuming you can qualify if you need another mortgage).

Downside is you'll be paying close to 8-10% on interest. And in Texas, HELOCs only let you take up to 80% of the appraised value

There's other products though that can allow you to use the equity to buy a new home without having to sell your old home. Move into the new home. Clean and sell the old home and voila.

Contingent offers aren't bad though in today's market in most places. That's because you're likely not having many fish biting, so if the only fish a seller has that's biting is one with a contingent offer… they are likely to take it and at least consider. Again, very dependent upon the locale, but still.

In reply to Red Pear Luke (BCS) There's other products though that can allow you to use the equity to buy a new home without having to sell your old home. Move into the new home. Clean and sell the old home and voila.

This is what I want to learn more about...

In reply to 380Ag With a HELOC you can access the equity to the legal limit and the choice to sell or retain as rental property is yours.

In reply to 380Ag we offer bridge loans that allow you to move into the new house before selling even if you debt to income ratio would be too high with your current mortgage, the new mortgage and a hypothetical third line of credit. Love to chat. Email is on my profile.

There are a number of similar products out there but all more expensive and more moving parts then our simply product.