Can you use a mortgage loan for anything other than buying a home?

Question

I have a scheme brewing inside my mind, however I don't know if its possible, or even legal. So, suppose I get a home loan. Do I necessarily HAVE to use it towards a house?

Answer 1

To get a mortgage loan they will want documentation.  And a lawyer.  The lawyer will pay the sellers.

I don't know your schemes, but you can also borrow against your home with a home equity line of credit and a second mortgage.  In that case the money is clearly going to other sources.

Answer 2

Yes, that is what it's for. You will have to show documentation.

Answer 3

I know people take out second mortgages to help pay for their kids college and such...so perhaps..

Answer 4

This doesn't seem to be a good way to do your finances -- in any case you might have to do accounting for it later, and you don't want there to be any glitches in your personal finance record.

Check out these resources, they might help you out:

http://www.stopsittingonyourassets.com/M...

http://mariansnow.typepad.com/assets

Great blog with lots of tips.

The book "stop sitting on your assets" by Marian Snow is amazing, it will open your eyes up about personal finance and tell you the things you should know.

Answer 5

YES If you tell them its for a home loan to buy a home.

YES they don't just hand you the money with their blessing, they finance the home, that way they have the home if you should default, that is a secured loan with the home being what they get if you don't pay.

If its for a second mortgage or equity line on a home you already own because you have equity, or another kind of loan maybe a secured loan of some kind, then you can use it for what you want.

Again they can take the home if you don't pay.

You actually need to own or be buying the home already.

Answer 6

When you buy a home you never actually have the money in your hand.  It's financed through the mortgage co/lender.  Also, the home itself is collateral on the loan.

Answer 7

No home, no loan. The house is the collateral, the mortgage is the loan. Bottom line, you do not HAVE an option to use the money for the home or not, because the money never touches your hands; the bank pays for the house, and you repay the bank.

http://mortgagefodder.blogspot.com

Answer 8

NO!

Try getting thru closing without it.  No one will put your name on the check - the check will go to your lender or the seller of the house.

Answer 9

What you're thinking about doing is called mortgage fraud.  It is a crime.  It will get you sued in civil court and charged with a felony.

BTW, it would never work.  Banks do not give you a check when you purchase land.  They give the check (actually, they wire the proceeds) to the closing agent.  The closing agent then cuts a check to the seller for the sales amount.  You never actually handle the money.