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Does anybody know of any banks in this day and age that would be willing to assume a third lien position for a home equity loan? My house (less than 50% LTV)has a first mortgage plus a grant that is in the second position. Due to the terms of the grant, I am unable to refinance the first mortgage to take money out. In addition, the grant will not subordinate to a home equity loan. At this point my only option seems to be to pay off the remaining 40k on the gran unless I can find a bank that is willing.

Thanks.

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HTV1229 said: Does anybody know of any banks in this day and age that would be willing to assume a third lien position for a home equity loan? My house (less than 50% LTV)has a first mortgage plus a grant that is in the second position. Due to the terms of the grant, I am unable to refinance the first mortgage to take money out. In addition, the grant will not subordinate to a home equity loan. At this point my only option seems to be to pay off the remaining 40k on the gran unless I can find a bank that is willing.

Thanks.
Why would you have to pay off a grant?

Actually, WTF is a grant ?

Why would you have to pay off a grant?

In order to remove the second position lien so I can get an equity loan.

xoneinax said: Actually, WTF is a grant ?

Basically a gift from the government in order to entice people to move into up and coming areas. In this instance I receive 50k if I remain in my house for 5 years (10k per year).

HTV1229 said: xoneinax said: Actually, WTF is a grant ?

Basically a gift from the government in order to entice people to move into up and coming areas. In this instance I receive 50k if I remain in my house for 5 years (10k per year).

You mean down and out areas right? Because why would they have to give out grants for up and coming areas?

So they give you a grant upfront, then bail you out in the end?

Sorry, I know this does not apply to your situation. It's just too tempting to mention it these days.

HTV1229 said: Does anybody know of any banks in this day and age that would be willing to assume a third lien position for a home equity loan?Even back in the day, you would be hard pressed to find a lender who would take a third position at a competitive rate (if at all). Good luck.

This has nothing to do with bailouts, foreclosure, or any of the other nasty stuff in the news. Its a very straightforward and legitimate situation.

The grant is essentially a mortgage that doesn't have to be repaid. In addition to the proceeds of his first mortgae, OP was also given $50,000 towards the purchase price of the home through a government program. He 'earns' $10,000 of that money for each year that he stays in his house. If he were to leave after 2 years, for instance, upon selling the house he would have to pay $30,000 back to the government. If he stays there for 5 years, then he has 'earned' the entire $50,000 and the grant is removed from the 2nd lien position. It never has to be repaid.

OP, I don't think any legitimate bank will take a 3rd position, even though you have a lot of equity in the house. You can try asking some lenders or mortgage brokers but I find it unlikely. Perhaps a hard money lender might agree but you will get onerous terms.

So you stayed in the house for a year and already have a 50% LTV? Did you put in a lot of downpayment (besides the 50k grant)? Or did you purchase the property well below market price because of govt. subsidy? In the latter case, I am sure there are restrictions on how much you can sell the house for (in the short run), effectively capping the "Value" in the LTV calculation.

HTV1229 said: At this point my only option seems to be to pay off the remaining 40k on the gran unless I can find a bank that is willingPay off a free $40k so that you can get another loan ? Unless this is some kind of emergency, it would seem unwise to flush 40k down the drain. Can you BT or cash advance against some credit cards; even that might be better ?

Back in the good old days, I had 3 mortgages on both my primary and on my vacation house from Wells Fargo. I'm sure they won't play ball anymore like that.

uutxs said: So you stayed in the house for a year and already have a 50% LTV? Did you put in a lot of downpayment (besides the 50k grant)? Or did you purchase the property well below market price because of govt. subsidy? In the latter case, I am sure there are restrictions on how much you can sell the house for (in the short run), effectively capping the "Value" in the LTV calculation.

I'm approaching my second year in December. A few factors in play here - I signed the contract over three years ago and had to wait for the house to rehabbed plus the neighborhood has really taken off.

The only restriction is that I must pay back the full grant amount if I don't stay in the property for the full 5 years.

xoneinax said: HTV1229 said: At this point my only option seems to be to pay off the remaining 40k on the gran unless I can find a bank that is willingPay off a free $40k so that you can get another loan ? Unless this is some kind of emergency, it would seem unwise to flush 40k down the drain. Can you BT or cash advance against some credit cards; even that might be better ?

I just want to consolidate about 35k in debts (cc's,personal loan, auto etc.) into one lump payment and am trying to figure out the best way. No I do not intend to throw the 40k - that is just the advice that the banks are giving me trying to get the business.

sethdallob said: Back in the good old days, I had 3 mortgages on both my primary and on my vacation house from Wells Fargo. I'm sure they won't play ball anymore like that.

Wells Fargo was pretty liberal even up to a couple of months ago - they even had a no-doc product out there. However they have even become more conservative now.



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