Re: HELOC ... Purchase Money or Non-Purchase Money
Posted by dr on October 03, 2008 at 16:00:27:
In Reply to: HELOC ... Purchase Money or Non-Purchase Money
Posted by Jerry - Ca. on October 03, 2008 at 15:01:46:
1. THE PURCHASE MONEY RULE:
In California, a lender who loaned you money to BUY your home, which you ORIGINALLY moved into as your primary residence, cannot do anything other than foreclose. This means if the foreclosure sale does not pay all “purchase money” loans, those lenders cannot sue you for the unpaid balance. Most importantly, this includes second mortgages used in many 80/20 100% financing deals. If you REFINANCED any of these loans, or paid down purchase money HELOC and drew down on it again, this rule does not apply.
As long as the original money was for the purchase and never re-fi or drew down and re-used it qualifies.
As to how do you get a pruchase money heloc, well, when we bought our house it came with 20% equity in it therefore instant equity for a heloc 80/20. Boy were we stupid to actually believe that appraisal.
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