Posted on: 03rd Mar, 2008 10:31 am
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).
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?
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?
Martha,
This is probably going to be a question for the bank because not all banks operate the same. Sounds like a big project and possible but contact several banks and see what they will be able to offer. Or find a loan officer who can be of help to you.
All the best with that project.
Jean
Loan Officer
This is probably going to be a question for the bank because not all banks operate the same. Sounds like a big project and possible but contact several banks and see what they will be able to offer. Or find a loan officer who can be of help to you.
All the best with that project.
Jean
Loan Officer
Hi Martha,
This doesn't sound like something a bank would do unless it's a renovation loan. My name is Will. I am a renovation specialist with Wells Fargo Home Mortgage. You can use our purchase and renovate program to achieve your objective.
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This doesn't sound like something a bank would do unless it's a renovation loan. My name is Will. I am a renovation specialist with Wells Fargo Home Mortgage. You can use our purchase and renovate program to achieve your objective.
[Promotional part deleted as per forum rules. Thanks.]
I neglected to mention that FHA 203k maximum renovation cost is 35K. They also will not allow structural renovations.
Will, good comments. I agree that this is a renovation loan. As a consultant if you don't know the amount of the rehab you can contact a local consultant and ask them to do a 'feasibility analysis' in which they will tell you what your approximate cost to fix it up would be in very short order and for a small fee.
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mike i hope you don't mind me pointing out that your response is a little late. the original post came in on 3/3/08 and the post you responded to was the same date.
your information and opinions are good...we've already seen that. i don't want you to get caught in the trap of answering questions that have grown full-length beards, however.
:)
your information and opinions are good...we've already seen that. i don't want you to get caught in the trap of answering questions that have grown full-length beards, however.
:)
