Can I get a Home Equity Loan to purchase a rental property?
So, that way I could use some money to rehab around the property rather than getting a mortgage loan. The rental properties are usually ranged $ 30K to $ 50K.
The Economy: a diagram by Eric Danielson
• WTF #1 – On the left is the guy who earns ,000/year. He’s told he can get a loan for 0,000 with no interest for 3 years and as a down payment. He doesn’t even need to prove his earnings! He buys a house for 0K.
• WTF #2 – 3 banks purchase the loan (from left to right) and all three take out insurance on it from AIG, even the banks who sold it up.
• WTF #3 – On the lower left is the guy who also takes out insurance on the loan, even though he doesn’t even OWN it.
• WTF #3a – The guy on the lower left will eventually be fired from his job at the bank on the right, but still get an big bonus and healthy severance package comprised entirely of taxpayer dollars.
Meanwhile, the guy on the left is laid-off stops paying his mortgage and his home is foreclosed upon. All of the loan holders want their money from AIG, which is over-leveraged and doesn’t have it. Time for a bailout!
Multiply the guy on the left by 3 million and now the banks don’t have enough capital to loan ANY money…even to each other! Time for another bailout!
Finally, on the far left is grandma, who had her pension invested in Wall Street and has seen it’s value drop by half in 6 months. Her dividend checks no longer cover the cost of her meds, so she stopped taking her blood pressure medicine.