Finance Questions

Posts Tagged ‘commercial’

Question: Mortgage Professionals ! Can You Use a HELOC to Make a Downpayment on Another Home?

I asked a similar question earlier today and a couple people said it would be fraud.

Answer: As I answered in your earlier email, people do, do this all the time, but usually to purchase a 2nd home or a vacation home or even a rental property. Read below about your house on the market (could be a catch 22)

There is nothing wrong or illegal about it at all. Equity is Equity, period. As long as you can carry both mortgages totaling $140,000 then you shouldn't have an issue. Banks don't dictate what you spend the cash on. It is a line of credit to be spent how, when and where you like it.

However, home equity lines of credit are tied to the prime rate. Prime rate is currently 8.25% and adjusts monthly.

Read the following ...

http://money.cnn.com/2007/04/11/news/economy/fed_minutes.reut/index.htm?postversion=2007041114

it is an article out today on CNNfn stating that the Fed may being raising the fed fund rate again. Add 3% to the fed fund rate and you get the prime.

Worst case scenario ... it goes up .25% each month for the next 6 months or 1.50%. If you can handle these potential increases then go for it.

But, nothing illegal. However, like I mentioned earlier, check with him before placing your home on the market. Many lenders will not lend any money on a home if it is on the market.

You may have to get the equity line of credit and close on it first. Then put your home on the market. Then you can purchase your new home (with your home on the market) you can prove your new home will be a "primary residence" or in other words "owner occupied"

Mortgages, Loans, Debt Consolidation, Bridging Finance

Question: The appraiser of my commercial property, apt. bldg, went into a bad neighborhood for his comps, can I sue?

I own an apartment building in a nice neighborhood. I wanted to re-finance the building. The appraiser, who was hired by the lender, and lives 2 hours away went into the bad neighborhood two miles away from my property, and used those as comps. Not too much has been sold in my hood for a couple years. he came in about half the value. Can I sue him? Who do I sue. This is 100s of thousands $$$ of loss. He is comparing my property, to those in crack neighborhoods. WHAT CAN I DO??

Answer: You really have no basis to SUE, per se, but you CAN challenge the appraisal. The way you would do this is to have the comps pulled from your area, or a comparable area, and redefine the value. At that point you contact his supervisor, and make a complaint, and ask that it be reevaluated using the appropriate comps. There are several basis for making an appraisal...recent home sales, and income basis are probably the most appropriate for your situation.
I suggest that you contact a Realtor, that has access to the MLS to assist you in looking up recent sales in your neighborhood to find the appropriate somps, and to have them do a CMA. A good Realtor, that knows your market SHOULD be within 5% of fair market value.
Once again, since the appraisal is only a professional OPINION of value, usually the only liability that an appraiser can incur is that of the price of the appraisal. However, if you can prove gross negligence, then you can report it to the state licensing board, and you may get somewhere with them. I recommend that you start with getting a CMA, to ensure that you have a REAL case of negligence, and then that you challenge the appraisal from within the company. If all else fails, have another one done. They are not cheap, but you may consider it for your peace of mind. Remember, the appraisers do NOT work for you, they work for the bank, to ensure that the bank does not get stuck with a below-market valued property. Complain to the bank. If they value you as a client, they will listen.

Rising Bird Inc Business Funding and Commercial Finance