Hi, I have an American Express Open Business Card. Is it possible to purchase a property at a discount with the card and then turn around and finance the property at a higher amount based on it’s appraisal. Pulling out several thousands of dollars while paying back the credit card within 30 days? If yes, how? particularly with the financing.
Thanks,
PR
Irogers,
Yes, it’s absolutely possible for you to do what was asked.
Can you qualify is the question?
Having a consultation with a mortgage professional should be your next step.
yes you can get qualify
Is it possible to purchase a property at a discount with the card ......
Fundamentally this is a cash purchase transaction. You are buying it with “cash” (credit card).
..... and then turn around and finance the property at a higher amount based on it's appraisal.
The only issue that you may have is a “seasoning” issue.
Most importantly, as Ben stated, is if you meet the parameters to qualify for a mortgage. Consult a qualified Broker or Lender to make sure.
As for the response from Lscalder. I would like to use your crystal ball. It is amazing that you can tell that this individual qualifies for a loan when you know nothing about them or the parameters.
i said yes he or she can get qualify i didnot say that he/she is qualify. with this day and time any one can get qualify for a mortgage it might not be for 100%. their is so many programs out their for every different scenario. people with out social security can get qualify for a loan. no credit score 100%. its so many lenders completing they have lowered their standard most of them not all.I have seen scenario where an undocumented person got qualify for a home loan. the only thing is with all of these program is higher interest rate but all the person have to do is refi after wards to lower payment
???
That really clears things up. :-//
I don’t know if I was more confused in trying to decode the message or understaning why somebody would purchase then turn around and refinance. Terms would be the same for purchase or rate/term refi. Understandable for properties purchased under market value and cashing out, but I don’t think that’s even what you were talking about.
That really clears things up. :-//I don’t know if I was more confused in trying to decode the message…
So I am not the only one. I would concur that the responses were “clear as mud”.
you can purchase a home and then refi after wardsbecause if you had bad credit when purchasing the home once you made a bout 2 payments the loan will appear on your credit which will increase your credit score you can then refinance rate and term to lower your payments. and yes once you put a mortgage on your creditreport
Here’s a question for you. About how much better would you expect that rate to be? 1%, 2%?
Ok, now so what’s your average loan amount? Maybe around $100,000. So let’s assume that these people are bad credit as you say. They’ll need a nonconforming (subprime lender), right. These loans will have a prepayment penalty. Oh, you want to buy out of the prepay so you can turn around and refinance in 2 months. So you do that, and you know most subprime lenders are going to say you cant make a yield spread and you’ll be charging your clients extra upfront fees.
Even if you did lower the rate by 2%, that’s only a savings of $70/m. Assuming you refinance them into another subprime loan with a 2 or 3 yr arm, they’d need to refi again to escape the steep rate increase coming. So in 3 yrs they’d save $2,100. Not even close to breaking even for the amount of closing cost you’ll charge in the 1st refi.
A better process would be to make sure they keep on track for a year after the purchase and guide them on how to keep their credit clean so you can do an FHA refi.
But it’s clear that’s not what your intent was. We know exactly what your business model is. Using a borrower just as uneducated in the mortgage industry as you to profit off of. At least that how it appears from most of your posts.
This site is a great source for real estate investors. Most of who will have decent credit but are looking for creative ways to structure investment deals. For those who dont have decent credit there are always hard money options, sub2, lease option (creative financing). Terms you may not be to familiar with. For clients that are credit challenged, there are not to many lenders (even subprime) that will do the deals most investors are looking for…100%, cash out no seasoning, rehab loans.
You may be in the wrong type of forum for the clientel that you would best be able to assist.
no tht is wrong first of all not every state have pre-payment penalties and its up ot the loan officer if they want to give their client pre- payment penalties which the loan officer makes more money on pre-payment penalties. Not all lenders have pre-payment penalties so do and some don not. Some time the bank sdk the loan officer if they want pre-payment penalties and the bank will in most cases give back rebate. Just because you have bad credit doesnot mean you will get hit with a pre-payment penalties. I have seen people with good credit with pre-payment penalties. It depents on the lender if they offer pre-payment penalties or the sate the person is in not really the credit score