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luvnlife
LIF Adult
Member since 7/07 981 total posts
Name:
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Mortgage Question
We might have the opportunity to buy a house from family but it needs a lot of work. But, it is double the size of our current house and in a great location.
If we were to buy the house for less than the amount it was appraised, is it possible to take out a mortgage for more than the purchase price and use the balance to renovate/repair?
We can absolutely afford the mortgage, it would be less then our current mortgage, it is just the cash for repairs that would be tough to come up. We bought our current house in 2005 and have zero equity in it because of the housing market crash.
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Posted 10/22/13 4:32 AM  |
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Prudential Douglas Elliman Real Estate
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jessnbrian
Only God knows His plan for us
Member since 4/13 7238 total posts
Name:
Jessica
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Re: Mortgage Question
In 2012 when we bought our house we were told that yes you could do that. We were told that yes, we could have taken out a larger mortgage for the purposes of house repairs - I'm not sure how exactly it works though because we decided not to thinking we would just pay cash for things as we felt comfortable doing them - nothing needed to be repaired or replaced just LOTS of updating.
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| Posted 10/22/13 8:00 AM |
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JandJ1224
Member since 6/06 5911 total posts
Name:
Jannette
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Re: Mortgage Question
There is a mortgage option that allows you to finance the cost of major home repairs, FHA 203K loan
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| Posted 10/22/13 8:36 AM |
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Re: Mortgage Question
Posted by JandJ1224
There is a mortgage option that allows you to finance the cost of major home repairs, FHA 203K loan
This is what I was going to suggest. You basically roll the cost of any renovations you want to do into your mortgage.
There is a streamlined version (the repairs/renovation costs would need to be under $30K, or maybe it's $35K, I can't recall), but for more extensive renovations, you would need to do the full 203(k) loan.
I just sold a house a few months ago where the buyers did this.... they were preapproved for $400K or so, they bought a house for $320K, and then they financed $80K of renovations including adding onto the second level (bedrooms) and adding a bath. But you don't need to do major repairs... you can get a 203(k) loan for things like carpeting, paint, new appliances. You just can't use it for luxury amenities, like putting in a hot tub or a tennis court!
If you do the full 203(k), there is some extra paperwork, red tape, etc. There's an FHA planner involved, you will need to use a contractor who is familiar with these loans and worked on 203(k) renovations. And of course, choosing the right lender for this is pivotal.
But it can be a great option, especially for buyers who are willing to do work but don't have a lot of extra cash on hand.
Let me know if you have questions!
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| Posted 10/22/13 10:10 AM |
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Ian&EmmesMommy23
My family is complete!
Member since 11/08 12970 total posts
Name:
Diana
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Re: Mortgage Question
you have FM!
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| Posted 10/22/13 10:51 AM |
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