why cant i get a home equity loan on my home that's now for sale?

Many reasons, but the main reason is the lender does not make money on initiating the loan, they make their money on the interest that's paid monthly.. if you sell the home before the first payment, the lender does not make money.. There is also the issue of fraud when in the past, lenders would do 2nd loans up to 125% of the homes value, and then try to sell it as a short sale.. .. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

The primary reason is simple... lenders make money on the interest on a loan. Who wants to take all the risk of giving a loan on a house you are selling shortly. The lender will only have the loan for a short period.. so short, that not only will they not make any money on the loan, they won't even pay for the start up costs on the loan. Big risk, no reward = why bother.

You may be able to, but most lenders won't offer loans on homes that are currently listed to for sale. Second mortgage lenders typically make money on the interest paid each month with a loan, not on upfront costs. If you are not planning on being in the home very long, if at all, the lender will outlay time and money for the loan process and you may sell the home before a payment is even made.

John has it right. You must cancel your listing, and give a good explation.

You would be hard pressed to find a lender who will give you a home equity loan on a home that is currently for sale. While lenders have different policies on this subject, most are cautious about lending money on a property that you don't plan on owning in the near future. In some cases you can simply cancel the listing but some lenders go beyond this and will not lend for a set period for time after a home has been listed. This means that even if you take your home off the market, you may not be able to get a loan until that period of time is up. Good Luck.

Why would a lender do that? You will be subject to a hefty Pre-Payment Penality.

The lender wants to make sure there is a reasonable time frame to make a profit. They make no money on upfront fee since very little if any at all. Of course the fraud issue that William, discussed. If you take the house off the market more than likely the lender will want to see it off the market 6 months to a year.

Most lenders do not offer loans on homes that are for sale, because they would not have the chance to make a profit off of that loan. The best way to get a home equity loan on that property is to take it off the market, and offer explanation as to why it was taken off the market.