Q:Jerry, What is the best method for using equity in my home for a down-payment on new construction?  Is it acceptable to open a home equity line of credit and pay off the balance with the sale of the home or are there other products on the market offering comparable interest rates and terms?

 

Thank you,

Mike

 

A: Dear Mike:

 

A home equity line would be my preferred option as a source of funds to use as a down-payment on a new construction loan.  You will be able to take advantage of the current rock bottom adjustable interest rates and the terms on home equity loans are quite flexible.  A bridge loan would be another way to finance the down-payment, however a bridge loans are generally more restrictive and there are fewer companies offering bridge loans.   Good luck.

Jerry