A co-worker told me that her son purchased a home and he got back money in the end on a home purchase that he put no money down on how is that?
2006-07-22 13:21:59 · 7 answers · asked by Luckys Charm 4 in Business & Finance ➔ Renting & Real Estate
There are a couple ways that might work but let me elaborate on two of them. BTW, I am a Mortgage Broker at Countrywide Home Loans.
#1 If the person purchases a house using their credit in a no-income verification loan, and the house has alot of equity in it, it is possible to both purchase the house and take cash out of the equity during the purchase.
Equity is the Appraised Value of the house minus the Mortgage balance.
#2 If a person buys a house for $300,000 but takes out a mortgage for $400,000, they would get a net amount of $100,000 back during the purchase. Of course they still eventually have to pay the bank back $400,000 + Interest.
2006-07-22 13:24:35 · answer #1 · answered by Anonymous · 1⤊ 1⤋
He could have also sold the property and had a double closing whereby he pocketed the difference between the purchase price and the sale price to the new buyer.
Or he borrowed hard money on the after repair value (apv) which lenders will do as well. It is supposed to be used for the necessary repairs. Theoretically, if he borrowed more than the cost of repairs, fixes it up and sells he would be coming out ahead.
2006-07-22 22:40:47 · answer #2 · answered by Sam B 4 · 0⤊ 0⤋
A lender will not finance $300,000 for a home you purchased for $250,000. That's a fact.
You can have an addendum that states a seller will contribute x amount of dollars back to the buyer at close of escrow for repairs, remodeling, etc.
The title company will deduct those agreed upon funds from the sellers proceeds and issue a check for that amount to the buyer at close of escrow.
This does happen in some circumstances, but it is not a frequent occurrence.
2006-07-23 03:08:30 · answer #3 · answered by Nick R 3 · 0⤊ 0⤋
That is Mortgage Fraud. Someone did not disclose the sellers gave the buyer a credit for closing. I am not denying this happens, but let me warn you that 100% financing does not allow cash back to the buyer at closing.
2006-07-22 20:45:46 · answer #4 · answered by Jacque w 3 · 0⤊ 0⤋
Sounds great dosen't it? Unfortunately this is just a ploy for stupid investors. If his credit is good enough, they will loan you as much as you can pay back. So the "money back" is just money that they add on to the loan. Interest and all. You should congratulate him on his upcoming foreclosure.
2006-07-22 20:25:14 · answer #5 · answered by Anonymous · 0⤊ 0⤋
I AM NOT SURE IF THIS IS WHAT IS BEING TALK ABOUT, WHEN I PURCHASED MY HOME, I GOT A CHECK FOR $900.00 THE TAXES FOR THE FOLLOWING YEAR
2006-07-22 20:25:10 · answer #6 · answered by helper 6 · 0⤊ 0⤋
since im only a teenager yes
2006-07-22 20:23:50 · answer #7 · answered by bowdigity19 1 · 0⤊ 0⤋