125% LTV? Are They for Real?

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effenheimer_IHB

effenheimer_IHB

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Are there really lenders who will do HELOC's at 125% LTV?

Let's see, I use an zero down neg-am on the biggest house I can get (I'd use a stated for this), take out a 125% LTV HELOC, bury the cash in a coffee can in the backyard, default when the reset hits, live for free for six months, rent and pay cash for everything while my credit heals itself.

That's it, I'm taking my blog down and buying a house.
 
Oh wait, I forgot about doing a cash-back-at-closing deal with an inflated purchase price. Might as well pocket some cash on the front-end and well as the back-end.
 
Yes they do exist and they are a fixed rate second loan for 15 or 20 years of 14% and up. Full documentation only and you better have some assets. Usually a FICO of 740 or greater is required and here is the kicker the loan amount is capped at $150K or less not much good that would do in OC. In areas where values are declining this loan is not an option and it is also not available for condos.

So it pretty much doesn't exist in OC. Most people who need this loan do not qualifiy for it for one or more of the above.
 
Wow... So it sounds like the only people who qualify are the ones who don't need it. Someone with a 740 FICO could get a loan on Prosper at a better rate! I wonder what would compel someone to take on one of these at 14%.
 
Yep I got a few when I lived in Tucson. Right about then the housing market was taking off. I got one then bought 2 houses with the money (99k houses). Then in turn got money off the other two and bought 4 more houses. After about a year I sold all of them and went into bigger and better things. So all in all I only made about 50k off of each house or so. Ahh the good years... now nobody in their right mind would ever try to do that.

-bix
 
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