I am a single parent in Minnesota with a steady full-time job but mediocre credit (thanks to the ex)
The only house in my area I can afford needs all new flooring, paint and drywall repairs. How can I get a loan for 10K more than the purchase price so that I can fix it up to live in?
2007-03-13 04:26:57 · 9 answers · asked by xanadude13 2 in Business & Finance ➔ Renting & Real Estate
FYI: It is is a duplex and TAX assessed at $160K. Others in the neighborhood are (not) selling at $160-170 but this is so filthy and vandalized inside it's listed at $143K, "as-is." Just thought if I could get the unit for $125K and put $10K in to it, I'd be set! A loan for $165 would be a payment (with stupid $150 Assn dues) of $1400-- I can't do that, but am paying $1000/mo now to RENT! So the loan of $140-ish is easily doable and I'd be doing the repairs myself but the entire house needs new flooring...
2007-03-13 04:46:08 · update #1
You will need to now if the home will appraise for more. Lets say they want 80k but it'll appraise for 90k. Offer 90k and ask for 10k back from the seller at closing. This is really the only way to get that money back.
2007-03-13 04:33:28 · answer #1 · answered by Mark P. 5 · 0⤊ 0⤋
Some lenders will give you more than the purchase price. However, they will want to see good credit. Why? Because the extra is unsecured. If you fail to pay, they'll take your house but still be stuck for the extra $10K.
As it is, a 100% loan will require (typically) PMI payments.
Best thing to do is try to find SOMETHING that's a little cheaper. You say the ONLY thing in your price range? While I don't know your local market, I'd think that there would have to be something that works for less. A condo? A townhouse?
Or, keep renting for a bit longer, until you can save up.
Or, find another way to get the loan.
2007-03-13 04:32:56 · answer #2 · answered by Jay 7 · 0⤊ 0⤋
You shouldn't need a loan for paint and drywall repairs. Those are simple things that you can learn to do yourself and and the cost of materials is not that much. Drywall is particularly easy if you can find someone who sort of knows what they're doing to help you. My advice is to just buy the house, move in, and just work on it as you can afford to. The important first step is BUYING THE HOUSE. See if Home Depot or somebody offers do-it-yourself workshops.
2007-03-13 04:37:01 · answer #3 · answered by badkitty1969 7 · 0⤊ 0⤋
You can't borrow 110% of the home's value that I'm aware of, and with ZERO equity, you can't get an improvement loan without PERFECT credit. That's what I was told anyway (my credit is fine -- not perfect -- and I recently bought my house through a local bank for 0 down).
Here's how I got around it. The government encourages you to make certain improvements to your house if you live in a re-development area. Every bank must make available these loans -- they are called CRA loans -- Community Reinvestment Act. Find out if your house is in a redevelpment area (go to your bank and ask). Turns out my house was, and my bank loaned me $10,000 at 6.5% fixed for 7 years. It was just enough to re-do my bathroom and fireplace hearth.
2007-03-13 04:36:21 · answer #4 · answered by cardinalboy97 3 · 0⤊ 0⤋
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2007-03-13 04:49:54 · answer #5 · answered by pronet168 1 · 0⤊ 0⤋
Not sure if Minnesota has such a plan, but my sister got a WHEDA (Wisconsin) loan for a home and then an additional $10K loan to fix it up. There were a few rules and regs, but it worked for her.
You can try here http://www.mhfa.state.mn.us/homes/MMP.htm and see if you can get what you need.
2007-03-13 04:36:20 · answer #6 · answered by Anonymous · 0⤊ 0⤋
A realtor told me that if you are a first time homeowner, there is a program for that. Talk to a realtor about it.
2007-03-13 04:34:47 · answer #7 · answered by karenhar 5 · 0⤊ 0⤋
You are way over your head! How do you expect to pay all that off? You better get saving instead of getting more loans!
2007-03-13 04:32:05 · answer #8 · answered by Jacqueline K 2 · 1⤊ 2⤋
And I want a million dollars in my bed when I get home!
2007-03-13 05:08:59 · answer #9 · answered by Anonymous · 0⤊ 0⤋