Using a line of credit from a bank or other financial institution is a great way to buy a home quickly when that type of quick decision making is needed. By securing the line early on in the process, you can quickly snatch up foreclosed properties and make quick purchases for vacation and investment properties and family homes.
Use your line of credit to pay the down payment on an investment property or a home for a parent or relative. Because the line of credit is similar to a credit card, you will only have to pay payments based on the amount you use rather than the whole amount you have been approved for. The interest and payment schedule will be calculated by the bank after you use any amount.
Buy a foreclosed home for a price that is far below its market value. Lines of credit are pre-approved, so moving on a foreclosed property quickly is easy with a line of credit because often, you need to pay for the home within days.
Buy a home at auction; many great real estate deals can be found at auctions. However, in this type of transaction, it is often necessary to pay for the home the same day as the auction. If you do not have a pre-approved mortgage, you can use a line of credit to take care of your purchase. The best part of a line of credit is it can be available to you for an indefinite time, whereas a pre-approval only lasts for a certain amount of time, often only 90 days.
Use your line of credit to buy a small vacation property in a tropical location. As we get older, our desire to relax and get away from it all increases. By using a line of credit on a present mortgage to buy a vacation home can be a great way to consolidate payments. Both your main home and vacation home payments will be serviced by the same company. If you need to refinance due to higher line of credit interest rates, you can do so later when the time is right.