Posted on: 04th Jun, 2007 12:58 pm
post your detailed question here.
friends have commercial property they are in the process of improving to sell. the property is already appraised at a higher value than they bought it at 2-3 years ago without the improvements they're now making. they have offered us a 10% interest in their share, so we would need $160,000.00 and then would receive our investment plus 10% of the profit upon resale. we are looking at getting a second mortgage on our home (appraised value $220,000; we owe 111,000). since it's commercial property, our lender has said they will only loan 80% of the appraised value of our home less $111,000 that we owe, leaving approximately $67,000 cash to us. is this how a second mortgage usually works?
friends have commercial property they are in the process of improving to sell. the property is already appraised at a higher value than they bought it at 2-3 years ago without the improvements they're now making. they have offered us a 10% interest in their share, so we would need $160,000.00 and then would receive our investment plus 10% of the profit upon resale. we are looking at getting a second mortgage on our home (appraised value $220,000; we owe 111,000). since it's commercial property, our lender has said they will only loan 80% of the appraised value of our home less $111,000 that we owe, leaving approximately $67,000 cash to us. is this how a second mortgage usually works?
the ltv and rates one ultimately gets has in great part to due with your fico score and front/back ratios---whether 80 cltv is appropriate for your credit/dti class is difficult to determine from the little you shared.
even with a loan with an 100 cltv allowance (and they do exist), you are fall short about 50k on your fund raising efforts.
refinancing using a fha 203b could potentially avail you to a 95 ltv cash out refinance allowance and would put you closer to your objective then your current bank's solution.
regards,
scott miller
even with a loan with an 100 cltv allowance (and they do exist), you are fall short about 50k on your fund raising efforts.
refinancing using a fha 203b could potentially avail you to a 95 ltv cash out refinance allowance and would put you closer to your objective then your current bank's solution.
regards,
scott miller
Hi Jernigank,
Welcome to the forums.
If you are looking to get a second mortgage on your home, you can qualify for a loan amount worth the total payment that you have done towards your first mortgage. This is because the total payment is equivalent to the equity that you have built on the home. So, the first mortgage amount minus $111,000 will be the amount that you can borrow.
Take Care
Welcome to the forums.
If you are looking to get a second mortgage on your home, you can qualify for a loan amount worth the total payment that you have done towards your first mortgage. This is because the total payment is equivalent to the equity that you have built on the home. So, the first mortgage amount minus $111,000 will be the amount that you can borrow.
Take Care
Hi Jernigank,
In general, when a person seeks a mortgage loan, he is able to get 80% of the appraised value unless he needs more and can qualify on the basis of good credit score and debt-to-income ratio. Now, when the lender is willing to offer you a loan worth 80% of the appraised value minus the amount you owe, he's quite justified and that's how a second mortgage works.
To know more on How Second Mortgage works, you may refer to our section on the topic.
Hope this helps...
God bless you.
Samantha
In general, when a person seeks a mortgage loan, he is able to get 80% of the appraised value unless he needs more and can qualify on the basis of good credit score and debt-to-income ratio. Now, when the lender is willing to offer you a loan worth 80% of the appraised value minus the amount you owe, he's quite justified and that's how a second mortgage works.
To know more on How Second Mortgage works, you may refer to our section on the topic.
Hope this helps...
God bless you.
Samantha
