5 Comments

1. col. Kurtz says:
   April 17, 2010 at 7:47 pm

   ¡Convoluted at best!!

   First off “Tax Value” is meaningless. Find out what is the “Market Value”, in other words, what is a well informed buyer, that has other options to chose from, willing to pay for that house?

   FHA may be your best bet. They generally dont require stellar credit scores but check w/a loan agent. And dont le them buffalo you w/the BS that they have to charge you a higher interest rate cuz of your poor credit! They WILL charge you an upfront Mortg Insurance Fee based on your poor scores but, that doesnt affect your interest rate on your loan. If your fiancé has poor scores and you dont need her to qualify then keep her off of the loan she will only drag you down as they will count her “Dings” against you!

   With an FHA 203k you can build that garage you need. That SWEET loan allows you to finance the Purchase and “Repairs/Improvements” all into the same loan!!
   ¿the catch? your total loan, purchase price + repairs, CANNOT exceed the “AFTER REPAIRED” value the home based on the Appraiser’s Opinion.
2. Makayla says:
   April 17, 2010 at 8:09 pm

   If you are a first time borrower of a home equity loan it is imperative that you have a checklist of essential questions that you need to ask each and every lender. The answers to these questions will provide a valuable reference to base your comparisons on. What’s the interest rate? Knowing this is crucial.
3. Beverly S says:
   April 17, 2010 at 9:02 pm

   The problems you will have is your credit and we lenders must use the LOWER of either the purchase price or the appraised value when determining a loan for the first 12 months of ownership. In other words even if the house appraises for $134,000.00 if you buy for $50,000.00 we have to use the $50,000.00 as the value until you have owned for 12 months. As for credit- if you don’t have a 620 middle score no lender is going to lend for a mortgage. Even during the subprime days the score requirements were 580. Sorry- good luck.
4. daeve930 says:
   April 17, 2010 at 9:51 pm

   So if I’m reading this correctly, you’re buying a foreclosure for 1/3 of the $117k TAV, and it has to be a cash only transaction.

   Then you want to build a garage and will need a loan of $30k to do that. For the first year you own the property, most lenders will only use the purchase price as the value, even if you pay 33% of the market value, so you won’t be able to get that loan for at least a year.

   You want to keep the payments low, so you’re getting a 15 year loan. Get a 30 year loan so the payment will be low. You can always make bigger payments to pay it off in 15 if you can do that, but get the longer term unless the rate is a lot higher.

   You say you both have bad credit, but you didn’t mention what the scores are, so we don’t know how bad your particular bad might be. And you don’t really mean you’d be willing to get married to get a loan. There are good reasons to get married, and bad reasons, but that would just be a ridiculous reason to get married.

   If you repost this question or add more details, you might include credit scores. I really don’t think this is going to happen though, unless the FHA is willing to do a 203 for you, but the seller doesn’t seem to want any loan at all.

   BTW, a low credit score will get you a higher interest rate. The risk to the lender is increased if you have a history of not paying as agreed, so to offset that, we increase the interest rate. It’s not BS at all. You only pay mortgage insurance (which is also priced by your credit score) if the amount you borrow is 80% or more of the value of the home.
5. loanmasterone says:
   April 17, 2010 at 10:17 pm

   You would need to contact a mortgage broker/banker that do hard money loans.

   These hard money loans will allow you to borrow up to 50%-60% of the After Value Repairs ARV) of the property. So based on the appraised value you have you would be eligible for approximately $67,000.

   If you only need $30,000 then you are within the limits of what you can borrower.

   These type lenders will give you a loan amortized for 30 years but the loan would be due in 5 years, some will make the loan due in 10 years, but this is rare. Your monthly payments would be as if you had a 30 year mortgage loan.

   Now by the name of the lender you should know that you are not gonna get the very best rates in the world, but you would accomplish what you want to do and that is build your garage and make other repairs that you think are needed.

   These lenders look more at the project (Property) as oppose to the borrower and his credit scores and other things that a conventional lender would look at to include most government underwritten mortgages

   In most instances your interest rate on loans are tax deductible on your federal income tax.

   For tax and legal matters you should always consult your tax consultant and attorney.

   After the five years and your monthly mortgage payments made on time you would be able to refinance your home at the appraised value at that time and you would have your garage built and other repairs done if necessary.

   I hope this has been of some use to you, good luck.

   “FIGHT ON”