7

If I use a mortgage to purchase a house, I can use the equity (which I'm assuming is fair market value minus what I owe) as collateral for a bank loan (second mortage, home equity line of credit). Can I do the same if I purchase the house through an installment sale where the seller retains the title until the house is paid off?

The context I have in mind is where I might need funds to make improvements to the house.

AOM
  • 73
  • 6

1 Answers1

18

If the seller retains the title then you don't own the property and cannot collateralize it.

In the end it's up to the bank what would an acceptable collateral be.

littleadv
  • 190,863
  • 15
  • 314
  • 526