Need Financing Guidance For 1st Time Deal
We are buying a home for 75,000 bank owned. The hosues are selling for 135,000 in the area. The city has a requirement for us to put up 25,000 for escrow when buying the home for repairs. I have talked to a few lendors and the say we can only finance for the price of the home and the 25,000 will have to come out of pocket. The bank/finance companies wont let us take a loan for 100,000 and give us the 25,000 for escrow. Does anyone have a suggestion on how to get this 25,000 financed? By the way, the repairs are only 5,000 -10,000 not 25,000 as the city says
line of credit on your current house, signature line of credit if you have good credit, cash advances from credit cards...
How about obaining financing for the 25k based on current appraised value of the house you want to purchase?
How about obaining financing for the 25k based on current appraised value of the house you want to purchase?
Janet is on the right track. See if you can purchase the property using a home equity line of credit against the house that you are purchasing. I have a local credit union that will loan 80% of the current FMV and there are lenders listed on this site that will lend up to 100% on Non-Owner Occupied. Of course the current FMV would have to be over 100k for that to work for you. If it isn't, borrow as much as you can from a lender and get the rest on credit cards, friends, etc.
One more thing, there are some lenders, usually your small banks, that will loan you money based what the value of the home would be after you have completed your fix-ups. Wish you well !!!
There are loan products out there such as rehab loans and construction loans that are specifically tailored to your situation. They will loan up to 95% ARV..Or, you could double close with a partner to pull cash out at 2nd closing. Find a lender that does not require you to escrow the cost if you go with one of the loan products above, they are ou there. A good broker, IMO, is priceless for rehabs. Obviously, if you double close, escrow will not be an issue..Best of luck
Regards-Pat
I plan to use my credit to buy the stuff to fix the house. What I am planning to do is take a loan against the house once its bought from a different lendor than the one I am taking the loan out for. I dont wont to piss off my lendor or mortgage broker by doing a refi that day they wont make money from it and I want to use them again. I need the escrow for a temproary Certificate of Occupency to make the fixes. This house is located in a very tough inspection process. Thanks for the help