Is getting a loan a possibility?

Question

I am wanting to buy a mid19th century brick plantation home. It's sits on 3.8 acres. A contractor has inspected the place and says that the house is very sturdy. The interior walls are nothing but the studs. It has the original windows (28 tall ones) which all need replaced. The electric wiring, plumbing, furnace and water heater are brand new--never been used. There's $36,000 worth of work to be done on the interior...just enough to make the house liveable. The brick work is going to be $28,000. The house with the land is selling for $40,000. My credit score right now is 599 (fair) and my boyfriend makes enough to cover a $500/mo pmt. Our rent right now is $500 and we'd move right into that house so we'd only have the one pmt. There are some other necessities we'd need to get for that house...like sinks and toilets since they didn't have indoor plumbing back then. So, I guess we'd be looking at trying to get a $150,000 loan.

Answer 1

Yeah just get the property appraised and go to the bank.

Answer 2

With your credit score, and assuming only your boyfriend has an income, (I assume that since he can only afford $500/month that he makes less than $2500/month) and you make no mention of any down payment. You cannot afford a 150K loan.

Principle and Interest (PI) on a 150 K loan at 6.0% is 900/month. Add a minimum of 250/month for taxes and insurance and your payment would be 1,150/month. You would need a combined income of about $4500 (minimum), a credit score of 700, and very little other debt to get this loan. Again assuming no down payment.

Alternatively and more realistically, apply for a 75K loan. Per the above rate, your payment would be PI 450/month; taxes/insurance would remain at $ 250 for $700 total. This would give you 35K for immediate home improvement.

Once you got the loan, made 35K in improvements, and paid for a year or so, get a second "Home-improvement" mortgage for 75K and do the remaining renovations. Your credit score will have improved tremendously (assuming you pay the loan on time). Once the improvements have been completed they do a re-fi.

I warn you away from interest only/variable interest loans. Your initial saving would be only $100.00 to $200.00 /month (1-5 years) with a back end cost of $300.00+/month for the remaining 25+ years of the loan.

These type of loans will work only if a major increase in income is expected in the near/very near future. However, if the market flattens, the expected income increase doesn’t happen, or if something unplanned happens (job loss, a child, unexpected medical expenses) you could find yourselves a big, big loser.

Answer 3

Unfortunately with interest rates being high and creeping even higher, a loan amount of $150,000 would carry a higher payment than $500 and you haven't figured in taxes and insurance yet.

Another problem with the work not being complete yet, is that you won't be able to get an appraisal to value the house at the amount of money you want to borrow. You're best bet would be to go to a local bank and see if you can get a line of credit to purchase the home and do the necessary repairs and then turn it into a fixed mortgage at the end.

Good luck. It sounds like an awesome place.

Answer 4

it would not understand that the repos were no longer your automobiles. in the experience that they are on your call they're your duty. in the experience that your girlfriend has no credit heritage then this is now unlikely to assist to have her cosign. after I moved to the U. S. I had a similar difficulty and slowly over the years equipped a good credit heritage by being smart with my credit strikes. i don't think of you're going to have a lot success and all people keen to grant you a private loan is going to fee you an insanely severe APR or purely wreck your thumbs once you do not pay. To be consumer-pleasant the desirable aspect you may do is keep your girlfriend thoroughly break away you financially. If she don't have a lot credit this is diverse than having poor credit. it is going to easily take time for hers to advance. you've a lengthy conflict to make it back to good creditworthiness. There are also the criminal themes in case you chop up up. If she keeps the vehicle in her call then she holds the only proper to it if so as this is to everyones income.

Answer 5

Sounds a little "iffy" mostly because your payment would mostly likely be more than $500, and .. are you working too, or just your boyfriend? If both of you can contribute to the mortgage payment, then it may be possible. But get advice from a mortgage counselor or finance manager at the bank. Just be sure you can do this before you commit to anything....30 years is a long time to be stuck with a payment you can't really afford.

Answer 6

If your boyfriend co-signs with you on the loan and his credit is better than yours, it's a possibility. Otherwise, getting that much could be difficult. Please think carefully before making this decision. The house sounds wonderful, but living in a place that is not fully functional (especially if it's without plumbing!) can be very unpleasant. Talk to your bank and look for other possible lenders online to see if your loan is feasible.

Answer 7

you definitely can get a loan with that credit score no problem. what u will need to see is what u will get approved for. i doubt it will take a 150,000 loan to do that unless u are going to be putting that money into furniture and so forth. but a loan would be no problem

Answer 8

You might be able to. I guess the best person to ask is a loan professional who will see what you are approved for.

Answer 9

you might be able to just get price value for the property then take it to your bank and ask maybe.