OK honestly I dont know a darn thing about this kind of stuff….so my question may in fact be among the stupidest questions ever asked by anyone anywhere……..but none the less, I gotta ask! LOL!!!
Here it goes….ok So lets say you want to get rid of one house and move to another house. Lets say you cannot afford the second house without first selling the first house……but lets imagine that for whatever reason, actually selling the house is an insurmountable problem for multiple reasons which do not (for this example anyway) necessarily need to be elaborated upon, only that for whatever reason selling it is near impossible for you. So here is my Idea. You go ahead and get the second house. You pay for it by getting a loan on the first house, and of course in order to get the loan you need collateral, which in this case you use your first house for. Now, you have your second house, but you owe the bank…….so…..you simply let them take the collateral to pay it off. So to restate this more clearly: You needed to get a new house, which is worth approx. the same as your old house. Normaly you could sell your old house and use the money to get the second….but that option is impossible for a number of reasons….so instead you just get a loan with your original house as collateral…then simply give the bank their collateral- i.e. your original house.
OK so my question is……is their something I am not seeing here? would this work as easily and as well as I imagine it does in my head? Or am I suffering from some sort of Delusion of Competance in understanding how the housing/bank/loan industry works…..this seems so cut and dry to me. You get a loan with your house as collateral. You give them their collateral. End of story……it seems as if I am probably missing something here as it seems far too simple…..So can someone please help dash my happy thoughts of moving to a new house??? LOL!!!!!