Obstacle 01 · Illustrative example
A downsizer’s equity, brought forward.
Imagine a homeowner with a roughly $1.8 million home who wants a condominium around $700,000, but is not ready to sell yet.
The possible plan.
A sufficiently sized HELOC on the current home could provide funds to purchase the condo for cash. The homeowner could move on their preferred timetable and repay the HELOC from a later sale, according to its terms.
A few things matter.
- The home value alone does not establish usable equity or approval. Existing liens, qualification and lender terms matter.
- The sale is not imminent when the HELOC is established, and the owner’s intent is accurately represented.
- Interest, ownership costs and a slower or lower sale must fit the plan.