Ask Any Of Your Loan Topic Questions

How to finance an "uninhabitable" foreclosure?

Lindsay - 2008-04-12 11:40:16 - Renting Real Estate

This house most likely needs a rehab loan--certain things render it uninhabitable, such as the pool in disrepair, no refrigerator, a few broken windows, etc. Or so we've been told. Three years ago we purchased a foreclosure that was in worse condition, with a regular mortgage and a HELOC to make the repairs. We are now being told that that option is impossible, even though our credit score is in the high 600s, and we have a down payment and we make more than enough money to be qualified. How difficult is it to get a rehab loan? The FHA 203k process seems ridiculous. What are other options? Can we get a cash-out refi or a home equity loan? If we get the house and then they want to base the home equity loan on the purchase price rather than the appraised value (which is at LEAST twice as much) then that screws up that idea. Can anybody help? We are ready to move on this house NOW! Also, the HELOC on the previous house was used to fix that house--we only took out as much as we needed. And this house will be for us, not a flip.

Best Answer:

If you have the house you bought three years ago use that HELOC to finance these repairs.

Answers:

I think those are pretty much your options. The only thing that can help you is if you know your way around in the mortgage industry in you area. If you do try to find private lenders that will help you. Most of them won't even make you pay the interest or the money until you sell it (if you buying as an investment) but it depend how well you know them.

If you have the house you bought three years ago use that HELOC to finance these repairs.

I have been looking at some forclosues that are uninhabitable with the idea of getting them cheap and fixing them up to sell. The uninhabitable ones appear to be the best deal financially because it is difficult to get financing to purchase them. I have found a local bank that does construction lending that will make a one year loan to purchase the property and will also provide the construction financing to finish the house. Then the property has to be sold or refinanced. One very important point that I recommend is that you hire your own appraiser (not the lender's appraiser) to give you an appraisal of the current value and the value of the property after you have finished. Often the lenders are asking too much even for the uninhabitalble houses. I make any offer I make subject to an appraisal by my own appraiser, not the lender's appraisal and I also make it subject to inspection by my contractor. If my appraisal comes back less than my offer I then wither reduce my offer to the amount of my appraisal or I cancel the offer and direct the seller (in this case the bank) to return my deposit. If they do not agree to return my deposit, I have them talk to my attorney who will get my deposit back, plus damages. If the seller (bank) will not agree to those terms I find something else.

Hi, I used "Credit Solution" to settle my debt and recover from foreclosure.They managed to reduce my debt up to 58% .It's legitimate.I came across this company on NBC News Special Edition.Check it out here: http://memurl.com/furetu