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Subject:  Re: New here! Have questions! Date:  5/6/2013  10:53 AM
Author:  2gifts Number:  306967 of 312185

Thanks for your reply AJ. I owe about 55% of my home's value, currently. So I can borrow 30k and still be under the 80% LTV. I plan to save enough for 20% of that by next year. I don't think I'm being unreasonable. There are at least 12-15 properties that are available less than 10 miles from my home that are listed for 30k or less. Single family homes and duplexes. I plan to spend the year preparing, learning more about owning investment property and saving.

If you can save the down payment, which needs to be 30% by the way since this would be an investment property with an investment mortgage, then I would do that instead of borrowing on your own house. Why would you put your personal residence at risk to purchase in investment property? I think you are much better off saving the downpayment, and then getting the investment property mortgage that then gets paid by the income generated by the house. If you can't make enough in rent to cover all the house expenses including the mortgage, property taxes, insurance, maintenance, something for potential vacancy, AND profit, then the house is not a good investment. Visit the real estate investing board for more info on that and to help educate yourself.

BTW this is contrary to the advice of my loan officer at our credit union, who advised I should keep a small balance on each card, 10-15% of the limit. Confusing. Why zero, vs. a small amount?

I suspect you did not hear the loan officer correctly. It does not affect your credit rating at all to carry a balance. All that does is cost you more and give the bank more profit. I suspect she said to only charge up to 10-15% of the limit so that you keep the usage ratio low, and you show responsible credit card behavior. Pay the whole balance off, only charge up to 10-15% of the limit on any card, and don't charge anything for which you do not have the cash currently sitting in your checking account.
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