Hi Len VT, If you've been holding your stocks for an extended period, you'll likely have a substantial capital gain built up and if you liquidate investments you'll have capital gain tax to pay, which will mean that you'll have to liquidate a larger amount of pre-tax asset value in order to have the after-tax amount needed for your renovation. Not only that, you'll have to pay commission to sell them and, after the house loan is paid off, commission again to re-purchase, supposing that you'd choose to buy the same stocks later. Not only that, I think that the markets are down now, so I'd rather not liquidate some of my stock market-based assets, these days, lacking serious need. In fact, I've been buying more, recently, and expect to buy more, later, as I expect an advance in the markets, though I think that it may be later than jkom51 thinks. I hear some folks telling of set-up costs related to a home equity line of credit, which is understandable, as a lender wants to be sure that the property is as claimed, is properly evaluated, lacks large loans against it now, etc. I have used stock certificates and mutual fund certificates as collateral for a line of credit, and had no set-up fees to pay. If you were to use stocks or mutual funds, you might qualify for a lower interest rate, in that liquidation would be much easier, in case of default. Also, I've allowed my line to sit unused for substantial periods, and there have been no inactivity fees, either. In fact, in that you have much larger assets than you'd need to liquidate to fund your upgrade, you might choose to take out a larger loan and make some increased equity investments currently. I understand that the interest rate on your home improvement loan would be deductible, but not being a resident of your country I'm not sure. If it is not, you'd want to keep the two loans separate, as the line of credit for further equity investment would be deductible in your area, I'm almost positive. While interest rates currently are low, I expect to see them rise, for when one considers the bad odour internationally that has developed in recent months over the U.S. sub-prime mortgage debacle, and the huge U.S. gov't. debt, much of it held abroad, it could well be that, in the light of the deficits developed recently, largely due to the Iraq war, it may be necessary for the U.S. gov't. to offer higher rates to foreign holders in order to entice them to make further loans, before long. Good wishes as you consider your options further - I hope that you are happy with your choices, later. ole joyful

I don't think you need to do anything right now. If the house sells at a satisfactory price, then both the first mortgage and the equity loan balance will be paid off at the closing, and the balance (minus agent's commission, if your using one) will go to you. You definitely should NOT pay off the loan with your savings. That cash provides you with financial flexbility that you will lose if you pay off the loan. A recent widow should hang on to her cash reserves until life settles down and her financial situation becomes more certain. If the equity loan is a HELOC with a floating interest rate and the house doesn't sell by the end of the summer season, you probably should do a refinance and combine both loans into one so that you don't have to worry about the possibility of rising interest rates inflating the size of the HELOC payments.

Foreclosure times vary greatly state to state. A year is actually a pretty good average estimate. Some states have redemption time allowances. Others don't. Frequently, people losing their homes to foreclosure file BK. BK is a federal action & foreclosures are stayed for several months. A lender must request, from the Court, a Relief of Stay. That can easily chew up 3-4 months from the clock assuming the BK judge will even grant the Relief. States using Deeds of Trust are in the minority. Some states use both. Even with the possibility of foreclosure owner financing can be a good investment. Out of curiousity, are you aware that you can own both the house & the mortgage through your IRA account? Yes, it's a good retirement investment. Lots of rules to follow though so know what you're doing before jumping! There's a valid reason why traditional lenders might not want to make your buyer a loan. Start-up businesses have a large failure rate. You didn't mention the type of business so I can't comment. But, your banker has a book that they use to help in assessing risk that gives those percentages. Call your banker. They'll help you & walk you through the steps should you decide to pursue. /tricia Here is a link that might be useful: Deeds of Trust States & Mortgage States

good grief. On an FHA 203b loan, you now have to have 3.5% of your own money; you can get a gift for the closing, or you can ask your sellers to pay closing, but you have to have 3.5% of your own money. All you're doing with your 401k is "borrowing" from yourself; it is your money. Your employer doesn't have a say in it, but you'll have to go through a process to get the funds out, as 401k money can be withdrawn only for certain uses; buying a home is one of the allowable uses. You need to check with the program administrators to find out an estimated time line; don't know how it is now, but several years ago, I had a sale that was put back for several weeks because the committee only met once a month. You might also check on using the tax credit for the down payment; I haven't had to do one like this, but my loan officer tells me it can be done. You'll need to amend your 2008 tax return, which your tax preparer will know how to do, & consult with your loan officer. Best luck, & don't get discouraged by the lectures people sometimes feel obligated or entitled to deliver.