Getting Cash Back @ Closing
I've been to many closings where the lender limits the amount a buyer can receive at closing. Even if the contract is written over the agreed upon purchase price, many times, lenders will not give the buyer the difference.
If a buyer wants to purchase a property but would like to obtain money for repairs at closing (say 10k), what are some ways to structure such a deal so that the buyer will actually receive a check or cash for the repairs or decorating?
The most common practice for this in most states is a seller credit at close. You need to find a broker or a bank that will allow unlimited seller credit's. They are out there. You could also get a rehabb loan if there is rehab work being done. The lender will use the sales price, plus the contract value of the work to be down, add them up, times by 90%, that is the max for investment property.
Example
House selling for $75K
Needs $30k in work
Subject to appraisal $125k
75+30=105k*90%=94.5k= loan amount
30k in escrow given to contractor in draws.
This loans are very hot with investors also. Rates are very competitive.
Hope of these work out if I find any others, I post them
Lori
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