We all have those days where we are short funds to close. One of the options we forget to think of is do you have something of value you can borrow from?

Today is for conventional loans. You can borrow funds to close that is secured by an asset. Some of the assets you can use are Home Equity Lines OF Credit (HELOC’s), automobiles, artwork, collectibles, savings accounts, CD, stocks, bonds, 401K accounts etc.

You will have to be able to document it is yours and the value and then the loan terms used to obtain the money secured by that asset.

The person or entity providing the secured loan cannot be a party to the transaction.

We will need to add the monthly debt payment to your debt to income ratios with the exception of 401K loans.

Be careful if you are using the financial asset for reserves or down payment. You must reduce the balance by the loan that they are obtaining from the available balance.

You can never use a loan or cash advance against a credit card for down payment. That being said you are allowed to pay for any upfront costs prior to closing up to an amount not to exceed 2% of the loan amount. If you are super tight, have them pay for the appraisal or credit report or any other fees that can be paid upfront with a credit card.

You may have to update the credit card payment with a supplement if you use too much.