No Seasoning....
Any info so I can better understand would be great...
My grandmother has given me a run down old house 1920, on wonderful land just outside the Detroit area. It was her intention, as well as mine to fix the house and add some space. However, I can not seem to get a loan. I have some credit issues, however the property alone is worth 100,000. What does a lender have to loose, just because it isn't seasoned. If I should default, they have the land. I am onlylooking for enough to pay the contractor. I really don't understand why the seasoning is such an issue. Like I stated, I would really like to understand it. :-(
always remember banks are in business to make loans, and profit from the interest on that loan. they are not in the business of foreclosing on properties as it can get very costly, so yes the property will be collateral but trust me they do not REALLY want to own it should u default on the loan.
once a bank forecloses and the property becomes an REO (bank owned), it's considered a liabilty to the bank, not an asset. I know the rules stink, yes. I also know that sometimes it's not fare that you have great collateral and cannot get a loan becuz of credit issues...been there. spend some time first cleaning up your credit. it may not be as bad as u think. i can point u in some directions with that.
as far as seasoning, I am assumingu mean the title, as the property is free and clear? check around. not all banks require seasoning. don't stop till u have been to every bank in your town. is having your grandmother or another family member co-sign for you, or even be a partner to you in this project an option? if partnering, you can combine better credit of one person to make the deal work. it's a consideration at least. don't get discouraged!! u can do a lot with no bank financing as well. try private investors in your area. put an ad in the paper looking for cash, asn give them a lein on the property as interest in the deal to secure the money. u will pay a higher interest rate but it's sometime's worth it. most investors won't look a credit report if the deal is sweet enough to make money. Be creative; that's what this biz is all about
good luck!
[addsig]
Thanks for confirming what I thought. I really think my credit score are good enough, because I have been to close on 2 loans, and then , suddenly the seasoning of the title is an issue. I understand that the bank does not want the property, heck I don't even want it the way it is now. Just getting a little discourged.
Thanks again.
You might move away from Banks and try Credit Unions, Finance Organizations and of course the old boys club that exists in every town that has money to play and lend.
You can of course get a co-signer someone in the family or close thereto.
Works well especialy if the co-ssigner is well known in the community and actualy owns property.
I think the deal is a dooer. The thought of all that good land should make you go for it.
Cheers Lucius
What are your intentions for the property after the fix up?
I know that the property alone is a great investment. My family and I intend to live in the house once it is livable. I need to be next door to my Grandmother. She is 84, and that is why she has given me the land to begin with. I have a company again, that claims that if I put my grandmother back on the title, and she then allows us to get a note on the land. That we could
close within a few weeks, however, if it is that simple, why hasn't anyone eles suggusted that. I don't know if that is TOOO creative.
Having just read an artical linked from this site, I think a distressed property loand,,, or hard money loan may be the way to go. I know that if the house was repaired and added on to,,, it would be worth close to triple what we are looking for to do the repairs and add an additional 900 sq ft.
Just more info for thought.