I have moved to an area with expensive real estate, but I still want to buy a little house (run down) that I can fix up and live in. I have $20K for a down payment, but lousy credit. Has anyone ever done a deal like this, maybe with owner financing or with some sort of agreement to share proceeds upon resale?
2007-09-23 09:58:38 · 8 answers · asked by Eric W 2 in Business & Finance ➔ Renting & Real Estate
look into a lender that can do a 203K Loan. It is a special loan that will allow you to get money back based on the estimated appraised value of the improved property. Catch is that you have to use contractors to do the majority of the work and get etimates from them before closing.
You need to work with a real estate agent that understands these types of loans which can be difficult to find. Interview them. If they don't know 203K programs-- keep looking. If you are in the Kansas City area I can help otherwise I may be able to provide a reference to a good agent throughout the U.S. My website is www.newhomerealtyofkc.com.
**addition*** Note to other writer. Realtors don't hate Owner financing beause we are afraid of getting paid on them. We are paid on the HUD1 which would still be there. Owner Financing is extremely risky to all, both buyer and seller. I would only think of it as a possibility if the seller has a lot of assests and can aford to take that large of a risk. That is not that many people. For the typical seller, a owner financing deal would not be within their best interest.
2007-09-23 10:22:37 · answer #1 · answered by Angela S 3 · 0⤊ 0⤋
Unless you get some kind of owner financing you will need a 20% or better down payment to get a loan. I went bankrupt many years before this current sub-prime mortgage mess that is going on now. The bank wouldn’t even think of giving me a loan with a decent interest rate unless I had a large down payment, and then I could only get an adjustable mortgage because the bank couldn’t sell my loan.
With the current real estate market you might be able to get the owner to finance it the sale for you and the terms might be better, but there is more danger. You have to ask yourself why someone would take payments if they could get all their money at once. Make sure you know the difference between the owner taking a mortgage against the property and selling to you on a land contract. Because of due on sale clauses; if there is a mortgage already on the house, you will probably have to buy on contract.
In my state (Indiana) if you buy on contract you own nothing. Title to the property doesn't change until the last payment is made. This means the seller is still the owner. What if something happens like you pay on it until the last payment is made and you find out the seller took out another mortgage on it, or the seller goes bankrupt, or loses a lawsuit?
But there is risk for the seller too. If you have bad credit, what makes him so sure he will get paid?
A lot of ifs can happen in a 15 year contract, you need to consult a lawyer to see what the law is in your state
By the way realtors hate contracts because they are afraid they won't get paid. If you have 20% to put down this will probably prove you are a serious buyer.
2007-09-23 10:24:11 · answer #2 · answered by Charlie & Angie G 4 · 0⤊ 0⤋
Find run down homes that are preforclosure of early stages of foreclosure. When you find one that you are interested in contact the lender that owns the mortgage. Find out if the loan on the home is assumable. Qualifying for assumable loans are much easier than qualifying for a standard mortgage because the lender has already excepted the possible of losing money. So when you step in and say you will take over it is great news for everybody. The person getting foreclosed on cause you are saving their credit, the lender cause they dont have to foreclose and lose money, and of course you cause you get the home when normally you couldnt get approved for a mortgage. Hope that helped.
2007-09-23 12:31:37 · answer #3 · answered by young2bballin 2 · 0⤊ 0⤋
You did not way what you consider 'expensive' real estate ( that is vague and varies by person ) ,
But if you can find an OWC ( owner will carry ) ,
Go that route .
Unless the purchase price is just $100K , then the $20 K would be the 20% down and you'd be able to avoid PMI .
>
2007-09-23 10:15:02 · answer #4 · answered by kate 7 · 0⤊ 0⤋
There are some issues to characteristic on your due diligence record previous what you have already stated. Get in the attic to envision for insulation. seek for water marks on the backside of the roof (leaks). Does it have an electric powered panel with fuses or breakers? be sure all the homestead windows function properly. Does it have copper or galvanized plumbing? Ask to work out the applying costs (gasoline, water, & electric powered) for the previous year. look on the floor once you're strolling around and examine for obvious dips and pay attention for loud sqeaking. look at dates on the water heater, furnace, and effective A/C to envision for dates (how previous they're) or labels denoting whilst they have been final serviced or repaired. turn the water on at each faucet to envision for water tension. look heavily on the outdoors door frames or any timber sufaces to be sure they're good. don't be affraid to press an area with your thumb (you're searching for termite injury) because of the fact paint can camolflage comfortable timber. look on the homestead from the two area from at distance of fifty to one hundred ft. Does it lean? Do the doors and homestead windows take a seat sq. and plumb? Is the roof line right this moment? Ask the pals in the event that they're conscious of any significant or minor paintings that become carried out on the homestead. examine the morter on the brick joints. Is it going to require a great style of tuck pointing? examine the basement for leaks alongside the partitions on the floor. Does it have a sump pump? examine the pitch of the backyard. If it rained, might the water drain remote from the homestead or run in the direction of it?
2016-11-06 04:47:23 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Probably your requirement will be also a good salary in order to cover the low down payment...
Maybe you will find here more information about the subject. There are some great articles about mortgages, refinance & real estate, etc.:
http://www.lendadvisors.com/
2007-09-23 10:22:29 · answer #6 · answered by Anonymous · 0⤊ 0⤋
yes you can do the FHA Rehab program.
It's very good for fixer-uppers....and they have a no score requirement.
You CANNOT have any credit lates in the last 12months though....they required only 2.25% down payment
2007-09-23 10:03:11 · answer #7 · answered by Anonymous · 0⤊ 0⤋
in New Jersey
2014-10-12 07:38:26 · answer #8 · answered by sage 1 · 0⤊ 0⤋