I own one home and am relocating. I would like to buy a distressed property at about 80% of its actual value (and have located two), but I want to minimize my monthly payments until my other house is rented out or sold (in a slow market) so that I am not stuck with two mortgages. Although I have been approved, the cost of two mortgages simultaneously will be too much for more than a few months.
2007-02-20 13:15:07 · 3 answers · asked by lawhah 1 in Business & Finance ➔ Renting & Real Estate
You have a few options. You could go with a low payment loan such as an option arm or other negative amortization loan. These will keep the payments on the second low for a couple of years while you fix it up, and sell the other. When you are done, you can refinance into a more solid loan.
Your other option is to take out a construction or a rehab loan. This will allow you to borrow funds for a shorter period (6 months to 2 years) to fix the house up and pay your mortgage, then change to more permanent financing.
A good mortgage broker will be able to show you your options.
2007-02-20 13:49:05 · answer #1 · answered by Ron B 3 · 0⤊ 0⤋
Well, if you ask me, no matter what you do, you will indeed pay for both houses one way or another. I know it is crappy to say it, but bottom line, sell off the first house as quickly as possible. Do everything you can to make it more appealing than the competitive offerings in your local market. As far as financing options, you could certainly look at an "interest only" type loan where you can defer your actual principal payments for the beginning of the loan. (These would be COFIs or COSIs or other loans). However, you still have to pay the interest - and it is an adjustable rate mortgage which means your interest rate will go up (a big risk in today's real estate market if you ask me). The positive side is it will start out with a very low interest rate, and will allow you to not have to make principal payments. A good mortgage broker can show you all of your options.
2007-02-20 13:24:56 · answer #2 · answered by whatrukidding 4 · 0⤊ 0⤋
I would make the offer on the distressed property with a contingency clause stating upon the sale of your home you will purchase the distressed property if your offer is accepted. Have the broker write that or something similar in the offer contract. Hope this helps.
2007-02-20 13:25:07 · answer #3 · answered by Anonymous · 0⤊ 0⤋