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 jernigank
Joined: 04 Jun 2007
Posts: 1
1.41 Dollars($)
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 Posted: Mon Jun 04, 2007 12:58 pm Post subject: Second Mortgage for investment |
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Post Your detailed question here.
Friends have commercial property they are in the process of improving to sell. The property is already appraised at a higher value than they bought it at 2-3 years ago without the improvements they're now making. They have offered us a 10% interest in their share, so we would need $160,000.00 and then would receive our investment plus 10% of the profit upon resale. We are looking at getting a second mortgage on our home (appraised value $220,000; we owe 111,000). Since it's commercial property, our lender has said they will only loan 80% of the appraised value of our home less $111,000 that we owe, leaving approximately $67,000 cash to us. Is this how a second mortgage usually works? |
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ezmortgageloanz
Moderator
Joined: 06 Apr 2007
Posts: 124
Location: National
37.57 Dollars($)
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| Posted: Mon Jun 04, 2007 7:33 pm Post subject: |
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The LTV and rates one ultimately gets has in great part to due with your FICO score and front/back ratios---Whether 80 CLTV is appropriate for your credit/DTI class is difficult to determine from the little you shared.
Even with a loan with an 100 CLTV allowance (and they do exist), you are fall short about 50K on your fund raising efforts.
Refinancing using a FHA 203b could potentially avail you to a 95 LTV cash out refinance allowance and would put you closer to your objective then your current bank's solution.
Regards,
Scott Miller
_________________
National FHA Mortgage Broker
www.BadCreditMortgageMakeover.com
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sara
Joined: 05 Jul 2006
Posts: 1206
Location: New Brunswick, New Jersey
223.95 Dollars($)
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| Posted: Tue Jun 05, 2007 1:11 am Post subject: RE: Second mortgage loan amount |
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Hi Jernigank,
Welcome to the forums.
If you are looking to get a second mortgage on your home, you can qualify for a loan amount worth the total payment that you have done towards your first mortgage. This is because the total payment is equivalent to the equity that you have built on the home. So, the first mortgage amount minus $111,000 will be the amount that you can borrow.
Take Care |
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Samantha
Community Mentor
Joined: 16 Sep 2005
Posts: 1539
Location: MASSACHUSETTS
137.28 Dollars($)
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| Posted: Tue Jun 05, 2007 1:47 am Post subject: RE: how much to get as second loan |
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Hi Jernigank,
In general, when a person seeks a mortgage loan, he is able to get 80% of the appraised value unless he needs more and can qualify on the basis of good credit score and debt-to-income ratio. Now, when the lender is willing to offer you a loan worth 80% of the appraised value minus the amount you owe, he's quite justified and that's how a second mortgage works.
To know more on How Second Mortgage works, you may refer to our section on the topic.
Hope this helps...
God bless you.
Samantha
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Know how to compare lenders with mortgage booklet |
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