Line of credit on home.,,,,,

[Plantman]

My mortgage company has approved me for a line of credit and I was wondering if this is good deal or not:

50K line of credit, prime plus 0%. Even borrowing the 50k , my loan to value ratio will still be under 80%. eliminating any PMI.

They pay all costs including doc stamps. I have zero out of pocket expense, and no expenses will be added into the line of credit.

It's good for 10 years. At which time I'll have to repay it or start all over again.

I've never done this before and was wondering what some others out there might think.

I was thinking about paying off a small loan I have and keeping the rest available to see if any other realestate opportunities pop up. If not, I'll let it sit unused.

I have pretty good disipline so I'm not worried about using it foolishly.

Thoughts?

Buy more real estate with it.

[Plantman]

Originally Posted by MedMech

Buy more real estate with it.

That's what I plant o do if the right deal comes along. Perhaps some income producing property that will pay the loan off for me as it appreciates.

Thanks

BC, I will definitely not be frivolous. Can't afford to be.

Originally Posted by Plantman

That's what I plant o do if the right deal comes along. Perhaps some income producing property that will pay the loan off for me as it appreciates.

Thanks

BC, I will definitely not be frivolous. Can't afford to be.

Don't overlook vacant land, since selling my Med biz I've been scooping vacant lots that have favorable zoning. If you play your cards right it's an easy double and the risk is much lower than a fixer upper.

The best place to look is homes in fully built neighborhoods on double lots, building potential maybe so-so but the adjacent neighbor sometimes pays stupid money to prevent a smaller house next door from being built. Once you get the lot stake out the smallest salt box foundation you can. If it's a good neighborhood you'll be taking bid's in 24 hours.

I agree with the vacant land idea. It is important to consider the homestead excemptions for bankruptcy law, etc. I don't know anything about the new changes to B law but it isn't going to get any easier/better for you if things go south. Homestead stuff is usually state specific, and right now I think its Kansas, Florida, Texas and a few other states that allow you to keep a house and cram down a car, IIRC. But, hey, a lot of people I know get a line of credit along with a new home loan so they can borrow to pay their mortgage if they gat canned or their firm doesn't work out. Nothing wrong with having it if you're a disciplined person. The lots near me that are just due South of the most recently "suburbanized" area are going for quite a lot of money per acre. Might be nice to buy and wait for Wal-Mart/Target/XYZ Prop. Dev. inc. to find you...

[Plantman]

the ladn buying boom in SFL has passed me buy as single family lots are way too expensive.

Central florida is blowing up as people who want to retire or slow down from Miami/Ft LAuderdale or have been priced out are moving there.

1.5-2 years ago you could have bought 5 acres lots fro 60-80k. Those same lots are going for well over 125k.

The gainseville are is still relatively inexpensive and I will be visiting shortly.

Thanks

[Brian Carlton]

You have a fine deal there. Borrowing at prime is always attractive, especially when the lender pays all the costs.

Just don't be frivilous with it.