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meganNbobby
Our Family is Complete
Member since 5/05 2774 total posts
Name:
Megan
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if you buy a house UNDER the real value of the house...??? mortgage type question?
can i take out more on my mortgage? or do i have to take a home equity then?
let me explain...
if i buy my grandparents house for $250K but it would need about 100K in renovations and the home is worth about 430K can i take out a loan for $350K then pay my parents and aunt $125K each then use the rest $100K to do the renvations? or would i need to have 2 loans one reg. mortgage for the $250k then a home equity for the $100K for renovations?
how does it work?
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Posted 1/14/08 6:13 PM  |
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leese
Sarge!
Member since 5/05 1965 total posts
Name:
Leese
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Re: if you buy a house UNDER the real value of the house...??? mortgage type question?
There used to be loan products that set your mortgage at the final appraised price after your renovations. I believe you had to pay some sort of fee and probably at the will of the interest rate when you were finished, but it accomplishes what you are looking for. I know Wells Fargo offered this.
Otherwise, I think you would have to buy it and then either in tandom (or after the fact more likely) you would have to take out a home equity loan on the house to the appraised value.
There are a few snags, such as having to be on record as the owner which can sometimes take a while (getting the deed in your name).
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| Posted 1/14/08 6:38 PM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: if you buy a house UNDER the real value of the house...??? mortgage type question?
it depends on how the house is sold -
if you are writing up a contract and are giving a "sales price" - the bank will not give you a mortgage for more than the sales price.
but as the PP mentioned, lets say your sales price and mortgage is $250, but the house appraises for $500. you can then turn around after you own the house and take out a HELOC (you will already have an appraisal).
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| Posted 1/14/08 6:48 PM |
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igottabeme
Its peanut butter jelly time!
Member since 1/08 2340 total posts
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Wouldnt you like to know! ;)
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Re: if you buy a house UNDER the real value of the house...??? mortgage type question?
if you're purchasing it directly from your family can you just make the contract price $350k and take out the loan for that amount. then after the closing just tell them to give you back $100k and they keep the rest and divide it amongst themselves?
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| Posted 1/14/08 7:40 PM |
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LJSMommy
Love him!
Member since 10/07 3189 total posts
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Re: if you buy a house UNDER the real value of the house...??? mortgage type question?
Posted by Meaghan729
it depends on how the house is sold -
if you are writing up a contract and are giving a "sales price" - the bank will not give you a mortgage for more than the sales price.
but as the PP mentioned, lets say your sales price and mortgage is $250, but the house appraises for $500. you can then turn around after you own the house and take out a HELOC (you will already have an appraisal).
HELOC loans are usually variable and right now the interest rate on mortgages is pretty low...........
If you need to do the Home Eq. kind of thing, you are better doing a home eq. loan not a home eq. line of credit.
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| Posted 1/14/08 8:35 PM |
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JRG71
*****************
Member since 5/05 5025 total posts
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Re: if you buy a house UNDER the real value of the house...??? mortgage type question?
Posted by igottabeme
if you're purchasing it directly from your family can you just make the contract price $350k and take out the loan for that amount. then after the closing just tell them to give you back $100k and they keep the rest and divide it amongst themselves?
We bought my DH's parents house like this. They sold it to us way under market value. We wanted to some stuff so we just listed the sale price for the total amount we wanted.
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| Posted 1/14/08 8:36 PM |
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CookiePuss
Cake from Outer Space!
Member since 5/05 14021 total posts
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Re: if you buy a house UNDER the real value of the house...??? mortgage type question?
Just a FYI...This can potentially cause a gift tax situation. Make sure you discuss this with a tax adviser to figure out your gift tax liability, if there is any. You want to make sure you will not fall in to Generation Skipping tax.
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| Posted 1/14/08 8:38 PM |
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ckone
LIF Adult
Member since 8/06 3014 total posts
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Re: if you buy a house UNDER the real value of the house...??? mortgage type question?
Our house appraised for the sale price. We had to take out 80/10/10 which is 80 mortgage, 10 Home Equity Loan and 10 down. There was no way around it for us and we had to pay the closing costs outright.
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| Posted 1/14/08 9:43 PM |
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meganNbobby
Our Family is Complete
Member since 5/05 2774 total posts
Name:
Megan
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Re: if you buy a house UNDER the real value of the house...??? mortgage type question?
thanks guys-
i'm sure my parents would just give us the 100K to use for the renovations
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| Posted 1/15/08 7:45 AM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: if you buy a house UNDER the real value of the house...??? mortgage type question?
Posted by maybeajunebaby
Posted by Meaghan729
it depends on how the house is sold -
if you are writing up a contract and are giving a "sales price" - the bank will not give you a mortgage for more than the sales price.
but as the PP mentioned, lets say your sales price and mortgage is $250, but the house appraises for $500. you can then turn around after you own the house and take out a HELOC (you will already have an appraisal).
HELOC loans are usually variable and right now the interest rate on mortgages is pretty low...........
If you need to do the Home Eq. kind of thing, you are better doing a home eq. loan not a home eq. line of credit.
right, she can do a HE loan instead of a HELOC.
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| Posted 1/15/08 8:33 AM |
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