Question: I bought a house in 2005. I got a mortgage on the house and put down 10%. The bank also gave me a heloc at the same time on the same home. I did not receive any of the $…the bank took as further down payment. Looking back it doesnt make sense that the bank did this. My mortgage broker was the one whom recommended. Was this legal?
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He probably recommended it so you wouldn’t have to pay Mortgage Insurance. It would have been the same if you would have borrowed the money from a friend or relative, gave the bank the money for the further down payment, then took out the HELOC to pay back the relative.