Posted: Mon Mar 03, 2008 9:19 am Post subject: Can I get a mortage and home equity loan simultaneously?
I found a house that I want to purchase in PA. It is a historic farmhouse built in 1800 and literally needs about 185k of work. There is asbestos, mold, structural issues and a ton of plaster, roofing, and utility issues. That said, it is owned by a bank due to foreclosure. They have owned it for 6 months and the price has dropped about 130k in the past year (the owner tried to sell for about 6 months). It is in an excellent location but I think because of the current market and the repair costs, nobody is interested. I have been through it 2x, once with a contractor and I am absolutely in love.
The asking price is 370k but I know I can get the bank to release it for less, the question is how much less and then how do I rehab it on top of a mortgage loan? I cannot sell my current house until the rehab is done so funds are not available to do it that way. I had a brainstorm but do not want to move further into the process unless I can get some feedback first. I may be completely off mark with my idea but it is worth putting it out there to see if it is an option.
I want to finance the property through the bank that owns it for a total of 240k. However, I want 185k of that amount to be a home equity loan. A mortgage of 55k and home equity of 185k is only 65% LTV, the combined payments will be within my qualification and the owning bank still holds both loans for 240k. Can I do this? The bigger question is, do you think the bank will do it?
If you are looking to purchase as well as rehabilitate the home, why not go for FHA 203K home loans. Know more about FHA 203K rehab loans from http://www.mortgagefit.com/texas/rehabloan-refinancing-1.html . _________________ Procrastination is the enemy of your financial sucess
Posted: Tue Mar 04, 2008 4:10 am Post subject: RE: mortgage and heloc combined
Yes a combination of mortgage and home equity line of credit is available with some lenders, but you need to find them out. It's almost similar to piggyback loans or should I say 80/20 mortgages.
Lenders offering combination of mortgage and heloc require only one application needed and one closing to attend and pay for. But the first mortgage can either be interest-only or amortizing.
Now what you can do is, talk to some lnedrs and find out what they suggest about such an offer or what can be alternatives if any. You may even seek no-obligation free counseling from lenders in our community before you move on to request for free quotes.
Well in this case an FHA rehab loan will not be good cause it only allows up to 30k max and he needs 180k and conforming lenders will not lend on future value. So you are kinda stuck. You need cash. As a rule banks will not allow a new value on the home untill its been 1yr+ since purchase date. Untill then its just purchase price or appraisal value whichevr is less. _________________ Eugene Volovik
Branch Manager
Team USA Mortgage
612-481-3127
Conventional, FHA and Commercial Lending
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