Avoiding PMI/2nd Mtg
Hi all. I entered into a binding purchase agreement in July of 2002, after which the seller tried to back out. Two+ years later, the court has awarded us our attorney's fees and is forcing her to transfer the property. Since the property is worth *much* more now than what we agreed to pay in 2002, is it possible to get a loan based on the current market value to avoid PMI or a 2nd mortgage? I've talked to one broker who said "no-way" and wants me to get a 1st and 2nd, then refi a few months later to lock in a 1st mtg. Seems to me he might just be fishing for broker fees. Any thoughts? The property is in California, if that matters. Thanks!
Jen,
Shop around. The policy for this varies by lender. What they are concerned about is your jacking the price up (there are HUD laws about inflating prices without seasoning). I think you should be able to find a lender who would be willing to agree to the loan without PMI. considering the situation.
HTH,
Robert
As they say the devil is in the details.
Have you been draging escrow out for two years? If so then it will be a purchase loan.
Is this a lease purchase? If so then yes you can count the current valuse. But you will have to shop around not all lenders will count this as a refi.
Look for a lender who will count exercising a lease purchase as a refi. Don't ask for anything else that is what you want. As long as you don't try to pull cash out it should not be a problem.