Posted on: 21st Jul, 2009 10:00 pm
My husband and I are looking at a bank owned property that is being sold as-is. Because of the condition of the house, our Realtor and mortgage broker both said it was unlikely we would be able to get a loan on it. The home appears to be structurally sound (new roof, etc), but there is no stove in the house, the pool is unfenced and full of dirty water, there is exposed pool plumbing, also possible lot split issues and permit issues (oh and it's maybe in a flood zone.) :lol: These are all, apparently, reasons the bank will not lend on this home.
We really like the place and want to put an offer in. What are our options with regards to the loan? I have heard of people doing repairs on homes they don't yet own to get a loan, but that doesn't seem like the smartest plan. We were planning on doing a traditional 30 year fixed loan, but I'm now looking into other options like the fha203k. Any experience with this kind of situation?
TIA
We really like the place and want to put an offer in. What are our options with regards to the loan? I have heard of people doing repairs on homes they don't yet own to get a loan, but that doesn't seem like the smartest plan. We were planning on doing a traditional 30 year fixed loan, but I'm now looking into other options like the fha203k. Any experience with this kind of situation?
TIA
Hi,
If the house is in need of repairs, you'll not be able to get a conventional mortgage to make the purchase of the property. You'll first need money to purchase the house, then take a short term construction loan at a high interest to carry out the rehabilitation work. Once the work is done, you'll need another long term mortgage to pay off the construction loan. The FHA 203k loan could be handy in this situation. You're not required to take so many loans. You can just use a single 203k loan for both acquisition of the property and rehabilitation of it. You can contact a local lender and discuss this option with them.
If the house is in need of repairs, you'll not be able to get a conventional mortgage to make the purchase of the property. You'll first need money to purchase the house, then take a short term construction loan at a high interest to carry out the rehabilitation work. Once the work is done, you'll need another long term mortgage to pay off the construction loan. The FHA 203k loan could be handy in this situation. You're not required to take so many loans. You can just use a single 203k loan for both acquisition of the property and rehabilitation of it. You can contact a local lender and discuss this option with them.
you can go for 203k loan only
first you have to arrange money for buying it.then approach bank for re constructing your property
first you have to arrange money for buying it.then approach bank for re constructing your property
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203K loans are absolutely worth considering, and you'd obviously need this type of loan for that property. however, you really need to dig into this "possible lot split issues" and "permit issues" before you attempt to make an offer.
if you go ahead and decide to bid on the home with the intention of obtaining 203k financing, make that plain in your bid. then have a contractor go with you to inspect and see precisely what's needed, so you can have an idea of how much you really need to borrow. remember that in getting preapproval from a lender, they'll have to take into account that you'd be borrowing additional funds for repairs/renovations.
a traditional loan will not allow you to make this purchase, based on your description of the issues that exist.
if you go ahead and decide to bid on the home with the intention of obtaining 203k financing, make that plain in your bid. then have a contractor go with you to inspect and see precisely what's needed, so you can have an idea of how much you really need to borrow. remember that in getting preapproval from a lender, they'll have to take into account that you'd be borrowing additional funds for repairs/renovations.
a traditional loan will not allow you to make this purchase, based on your description of the issues that exist.
