A real estate agent describes how they helped a client finance a second home in Florida after the original lender fell through. They used a home equity line of credit and gift funds to close the deal when rising interest rates made the numbers work differently than expected.
Story time. Today we had a client that lives in Illinois building a second home, brand new in Florida. They were under contract with the builder's lender this entire year. But the builder's lender dropped the ball and forgot to check that interest rates have went up, which we all know. So this client no longer qualified for two mortgages. Their Realtor called us real quick because they know we can get stuff done. We have a lot of creative options and we know how to use them. So here's the game plan. What they were doing is saying, hey, this could be a second home. But they didn't want to go through the hurdles of an investment property. So they were going to with the builders lender have a gift funds from their parents to cover most of the down payment, which is allowed on the second home. But since they don't qualify, we had to flip it to an investment property with us. And you can't use gift funds on an investment property. So now they don't have the down payment. What do we do? Well, we noticed that they had a home equity line of credit on one of their homes back in Illinois. So we got to thinking, hey, you're getting gift funds from your parents. Can't go to the down payment in Florida, but you could use those gift funds. They were enough to pay off the remaining balance of one of their homes in Illinois to wipe that payment clean. And they could use the HELOC on that home and draw their own funds, which then could be used for a down payment. That secured the deal, allowed all things to work, and these people are going to be in their home by the end of the year.
