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Tine73
Member since 3/06 22093 total posts
Name:
*********
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Fixer-Upper mortgage/loan question
Sorry if this has been asked before, but if I buy somewhat of a fixer upper and want to put lets say 100 - 150k into the house, i have to get a mortgage for the house and another type of loan for the renovations, right? Would I get a HELOC? or something else?
Thanks in advance - Christine!
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Posted 12/14/06 12:39 AM  |
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BabyBoy
is Skylar Elizabeth
Member since 5/05 4189 total posts
Name:
Tom
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Re: Fixer-Upper mortgage/loan question
Yes...the second loan would have to be a personal loan or some other source. HELOC is when you house is worth something. HE is taking money based upon a difference compared to your mortage and how much is it worth. At this time, your mortage woulnd't do that. Sure, once renovations are compete, it will be worth something. Bank may loan you money but at a high rate...
anyone correct me if i'm wrong in saying about HELOC
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| Posted 12/14/06 7:15 AM |
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snowprincess
My happy babies
Member since 3/06 3428 total posts
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Re: Fixer-Upper mortgage/loan question
when we thought about getting a fixer upper- it was recommended to put zero down - use the money for the down payment for renovations - then refinance with better options with a new appraisal or get rid of the pMI
just nbe careful on terms of loans - so adjustable rate mortgages don't allow refiance for 2 years and some pmi may require a minimum time period before the house is reassessed
but it can be better in the long run to do it this way because you get the house way you want it
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| Posted 12/14/06 7:41 AM |
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bikramaddict
mommy-to-be
Member since 8/06 4376 total posts
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Re: Fixer-Upper mortgage/loan question
Posted by snowprincess
when we thought about getting a fixer upper- it was recommended to put zero down - use the money for the down payment for renovations - then refinance with better options with a new appraisal or get rid of the pMI
just nbe careful on terms of loans - so adjustable rate mortgages don't allow refiance for 2 years and some pmi may require a minimum time period before the house is reassessed
but it can be better in the long run to do it this way because you get the house way you want it
You can avoid PMI if you take out two loans...an 80/20. Save your downpayment for renovations as suggested above and take out the second loan. You can get a fixed rate for both. The second loan will have a higher interest rate -- I don't think there's any way around that.
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| Posted 12/14/06 9:14 AM |
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Tine73
Member since 3/06 22093 total posts
Name:
*********
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Re: Fixer-Upper mortgage/loan question
Thank you for your responses.
But I can just put 20% down to avoid PMI, right?
Right now this is a hypothetical question bc I havent even seen the house yet - I just like to know what I may get myself into!
We were orginally going to put about 40% down on a totally updated, much more expensive house, so putting at least 20% down on the "cheap" house seems like peanuts...Is it a bad thing if we put 20% down?
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| Posted 12/14/06 9:46 AM |
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nixy
LIF Adult
Member since 9/06 1575 total posts
Name:
K
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Re: Fixer-Upper mortgage/loan question
It's not a bad thing at all, there are a lot of people who cannot afford to put even tha much down. Your payments will probably be similar to what they would have been if you put 40% down on a more expensive house. If this is a starter home, it is probably the better investment, b/c with the updates you can get a better return on your money.
Plus you can make the house what you want it to be.
But, it will be more work and it will take time to get it the way that you want.
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| Posted 12/14/06 9:52 AM |
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Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Fixer-Upper mortgage/loan question
Posted by BackInNewYork
Is it a bad thing if we put 20% down?
most people don't even put that down- 20% is considered alot these days
if they home needs work- I would put 20% down and use the rest of the money for the repairs- much cheaper then a HELCO- the rates on those can sky rocket
you wont have to pay PMI if you put 20% down
or you can put nothing down and do an 80/20 and once the house is updated you can re-fi and the house will appraise for 20% more I am sure- then you end up with 1 loan and no PMI
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| Posted 12/14/06 9:53 AM |
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Tine73
Member since 3/06 22093 total posts
Name:
*********
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Re: Fixer-Upper mortgage/loan question
Thanks 
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| Posted 12/14/06 10:02 AM |
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