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snarf

How do I access my immense equity on my home in Texas?

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I have a homestead that has more equity than the loan amount. the house has a garage apartment with a separate electric meter, but the water is not separated. The real estate will continue to grow in value fast because the home is in downtown Austin.

I take rental income that covers the mortgage.

Texas doesn't count rental income when looking at income for equity loans. Texas also doesn't allow equity loans on homesteads with 2 separate electric meters.

Please help, how do I access the equity in my home?

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no, cash out is equity and under the same laws apparently. fannie mae won't do cash out for 2 reasons:
1. they won't consider rental income when looking at income re: fannie mae

2. they won't give cash out on a home with a separate electric meter on the premises

Edited by snarf

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You need to talk to other banks. I use a smaller local bank that keeps loans in house and doesn't always have to follow Fannie Mae guidelines.

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You need to talk to other banks. I use a smaller local bank that keeps loans in house and doesn't always have to follow Fannie Mae guidelines.

Thats what I was told. I've talked to two small banks so far and they are sticking by not being able to do a HELOC or other equity loan because of the separate meter. Since I have over 400k in equity, (well over the note amount and in an area that regardless of the economy is just going to keep increasing )is it worth my while to change the meter to all in one? It still has a long term renter.

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Boy I hate the thought of losing the seperate meter. Guess that's an option but I would rather try 20 banks first. Someone will. You just have to find them.

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Boy I hate the thought of losing the seperate meter. Guess that's an option but I would rather try 20 banks first. Someone will. You just have to find them.

Me too, but I also don't want 20 dents in my credit from hard pulls. Unless I go to them all and say: I'll let you know when to pull it, and then tell them to all pull on the same day.

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Could you cut out a 1/4-1/2 acre plot and separate the title/deeds?

Oh. It's a garage. Is it a free standing garage?

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Yes, it's a separate garage apartment but the property is all my homestead. I collect rental income on it AND live in it. Texas is weird about rental income too.

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Boy I hate the thought of losing the seperate meter. Guess that's an option but I would rather try 20 banks first. Someone will. You just have to find them.

Me too, but I also don't want 20 dents in my credit from hard pulls. Unless I go to them all and say: I'll let you know when to pull it, and then tell them to all pull on the same day.
they don't have to pull just to tell you whether or not they can do an in house loan like I'm talking about.

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Could you cut out a 1/4-1/2 acre plot and separate the title/deeds?

Oh. It's a garage. Is it a free standing garage?

Yes a free standing garage. Separating the plat would be a process and not worth it.

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Boy I hate the thought of losing the seperate meter. Guess that's an option but I would rather try 20 banks first. Someone will. You just have to find them.

they don't have to pull just to tell you whether or not they can do an in house loan like I'm talking about.

 

Ok cool, so what you are saying is to walk into private small banks, show them my numbers and they will consider it without doing a credit pull until they give me a firm yes?

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Boy I hate the thought of losing the seperate meter. Guess that's an option but I would rather try 20 banks first. Someone will. You just have to find them.

they don't have to pull just to tell you whether or not they can do an in house loan like I'm talking about.
Ok cool, so what you are saying is to walk into private small banks, show them my numbers and they will consider it without doing a credit pull until they give me a firm yes?
Yes or call. Numbers don't even matter at this point, you just need to search for a bank that is willing to do a cash out refi on a multi family property.

 

Now it might take a commercial loan, and interest might be 4-5%. I'm just sayin it can be done.

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how is that possible when the property is classified as a homestead?

Why don't the numbers matter? are you saying the fico numbers dont matter or the equity or both?

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I would ask Dallasloanguy or Brian on the mortgage forum they may have more ideas.

Thanks! I'll do that.

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how is that possible when the property is classified as a homestead?

Why don't the numbers matter? are you saying the fico numbers dont matter or the equity or both?

I don't have any other answers, I'm not that familiar with Texas.

 

When I say the numbers don't matter I mean if a bank says we don't do this type of loan why would you have them pull your credit then? Find out if they can do the loan type then you apply and have credit pulled. You have already said any bank that is selling the loan to Fannie Mae can't do it.

 

Maybe see if there is a knowledgable mortgage broker or even a good real estate lawyer around you that you could ask.

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Right, I agree with that. I'm not sure how private banks would loan out based on equity. Maybe they are able to buy the loan from the current lender. This is where I need some education. I have a lawyer but he just said to go to private bankers. He's not an accountant or underwriter - I fear the banks won't like me because I work for myself and therefore write off like every small business owner. But my rental income is substantial. Which is why it is stupid of Texas to not consider that income when doing any kind of homestead refi or equity loan. It pays the freaking mortgage and then some, whereas my business net would not be the right ratio to mortgage payment for loan consideration. It's like ignoring half of my income. Texas Schmexas!

Edited by snarf

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Is it in foreclosure? If not I would move this to the mortgage forum for better responses

What mortgage forum?

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Is it in foreclosure? If not I would move this to the mortgage forum for better responses

What mortgage forum?

 

The mortgage forum on this site under the Financing category.

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Check with your local real estate investment group (check Meetup com). Talk to a hard money lender and probably a title company representative for ideas and a more accurate assessment of your property's value and potential. You might get a little more out-of-the-box thinking with that group given the nature of the business.

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Has your rental income been on your taxes for two years? I don't see how they can ignore rental income. Most banks want to see it on your taxes for 2 years and I believe they only count a percentage. I don't see why texas would be different. What if you wait for a turnover cut service to the apartment and call it a single family? I don't know what position your in but over 400k I'd sell if I had to. Unless the rental income and appreciation is so great it'd be beyond stupid. I would think your return would be way better turning that 400k into a downpayment on a very large multi or multiple smaller multis and sfrs.

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