how does it work when some poeple buy a home they get money back. I don't know how it works is it that they are approved for a certain amount and if the house is less than what they are approved for than the can take the remaining of what's left. For ex i want to buy a home for 100,000 but i'm approved for 150,000 are you able to take the whole thing or how in the world do they get money back. i talk live chat with a couple mortgage companies and they said you can only get what the house is worth. If you would have went to a bank or some where else would it be eaiser than i mortgage company can you get what your are approved for or what then home is worth. Please help me understand
2007-10-31 08:16:22 · 9 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
If you are purchasing a house, you can not get any money back. No ifs ands or buts about it. If the seller agrees to give you money back at closing or after closing, that is considered fraud. Do not do this, they are (the federal Government) is cracking down big time on this.
If you already own the home, you can refinance for a certain % of what the house is worth and it will all depend on credit.
Most lenders have a "seasoning" time and it will vary by lenders, as to how long you have to own the home before you can do a cash-out refiance.
BEWARE of sellers, real estate agents and brokers/lenders who instruct you to take cash back from closing. The only way to do this, and it still may not be legal, is for it to show on the HUD 1 form from the lender with their approval.
2007-10-31 08:26:43 · answer #1 · answered by timothy l 2 · 2⤊ 0⤋
If the house that you want is $100,000 and you're pre-approved for $150,000. Then you have to write the contract as if you are buying the house for $150,000 and have in the contract that the seller is offering $50,000 back at closing for you to use at your discretion. The problem with this is, the mortgage company that you're getting your loan through will more than likely do an appraisal on the home to see the value and might not loan you the money to buy a house that is not worth the asking price.
2007-10-31 15:24:14 · answer #2 · answered by jdecorse25 5 · 0⤊ 3⤋
If you buy a house for $100,000 and you're approved for $150,000, you will only get a loan for $100,000 (cost of the house). When they say you'll get money back, it's means the real estate agent has offered you a deal where you buy the house and they'll deduct a certain amount from your closing cost. You will not be given $50,000 because you're approved for that much. The amount of loan you're approved for depends on your credit history, debt and income.
2007-10-31 15:33:37 · answer #3 · answered by Mrs Apple 6 · 0⤊ 1⤋
The Morgage companies have revised their lending practices because of all the mortgage defaults. One or two years ago Mortgage Companies would lend up to 1.5 X what the property was worth so the excess was applied to closing cost or money back. The therory was that the house was going to gain value over the course of the loan so it would be worth the laoned amount by the time the buyer sales. Unfortunately housing values dropped and many people were stuck with huge payments on homes they couldn't sale.
I wouldn't advise borrowing anything more than you absolutly need to.
2007-10-31 15:28:23 · answer #4 · answered by Anonymous · 0⤊ 1⤋
The house is worth 100,000 You are aproved for 150,000.
The house needs decorating, needs new furniture and your car is crap. The mortgage company may well let you have an extra 20-30 thousand for just this situation and it will be added to your mortgage. You can pay this off with higher payments or increase the length of the mortgage term.
2007-10-31 15:28:30 · answer #5 · answered by veg_rose 6 · 0⤊ 1⤋
You cant, you only get the value of the home, and maybe up to 3% above to help with closing costs. There is no way a bank will allow you to get 50k back at closing. Also, if you lie and say you are paying 150k, but only pay 100k and get caught you are in big boy prison. Its called loan fraud. Also you have no protection that the seller will give it to you because you cannot have it in writing, and if you did all it would do is convict you of loan fraud. So as a seller i am keeping your 50k, and there would be absolutely nothing you could do about it.
2007-10-31 16:28:27 · answer #6 · answered by frankie b 5 · 0⤊ 0⤋
In most cases, you can only get 100% financing, plus a few more percent to cover closing costs for the purchase. When buyers get substantially more back than those few dollars, they are part of lender fraud.
2007-10-31 15:24:46 · answer #7 · answered by acermill 7 · 1⤊ 0⤋
To make a long story short, lenders will allow credit for your closing costs. If you are refunded anything at the close of escrow, it cannot be higher than what you came in with. If your good faith deposit is 2k, then you will be allowed to walk away with 2k. Anything else is fraud.
2007-10-31 15:38:18 · answer #8 · answered by sunshine 3 · 1⤊ 0⤋
Unless they are buying them cheap and turning right around and selling for a profit.
2007-10-31 15:24:55 · answer #9 · answered by tarie75 4 · 0⤊ 1⤋