Home Loans Based on Your Stock Portfolio?

Yes, you read right. It is possible to get a loan to buy a new home based on your stock portfolio. In other words, you may be able to get through the home-buying process without any appraisal of the home and other traditional mortgage paperwork.

In order to get approved for this type of loan, you must have a reasonably high net worth and a significant stock portfolio. The stock will be your collateral, instead of your new home. Of course, the loan will still have to be underwritten based on which stocks you own.

What's the plus side of a loan based on your stock portfolio? Well, there are actually quite a few positives: 1) If you find the right lender, the processing time may be a lot faster than for a traditional home loan; this is especially helpful if you want to close early; 2) Credit scores are not as much of an issue as with traditional mortgages -- that is not to say, however, that your credit score will not be taken into account; 3) The loan typically has a fixed interest rate, which is usually lower than a traditional mortgage rate; and 4) The loan is non-recourse.

Of course, there's a downside as well. What happens if the value of your stocks drop? You have to make up the difference with cash (or other outside financing). Also, you have no option to pre-pay the loan, so you have to work with the lender to find a term that you feel will best meet your needs!

New Disclosure Rules for Illinois Residential Real Estate Sales

It wasn't too long ago that the Radon Disclosure became a requirement for every residential sale in Illinois. Now, the Radon Disclosure has been modified. What's new? Well, 1) If you're selling a condo or co-op on the third story or higher, you no longer need to provide a Radon Disclosure at all; 2) If you are a seller and your home previously had elevated radon levels which have since been mitigated, you will have space to disclose this on the Radon Disclosure; and 3) A new Radon Disclosure form is now available and should be used whenever a Radon Disclosure is necessary.

There is a also a new Illinois Residential Real Property Disclosure form available! Again, this new form should be used in all Illinois residential transactions. There is one primary difference between the old disclosure and the new one -- now the seller is required to disclose whether or not he is aware if the property has been used as a meth lab in the past.

Real estate agents and for sale by owner homeowners beware -- the law requires the use of the new forms! If you don't have them already and are in the process of selling a house, make sure you obtain and complete these forms right away!