Does anyone know of how I can do a good search to find out who has the fewest points and best rates in my area (MD)? I don’t know where to start. I want to set up a fall back position if I am the highest bidder in an auction and my traditional mortgage doesn’t come through because of the condition of the property (not too bad, but needs some work).
Thanks so much.
What part of MD and what auction? I’ll give you a list of HML’s but they all like funding local properties. How much cash can you put in? What’s the properties ARV. What’s your estimate on repairs?
Hi, it’s Montgomery Co. You know what, I haven’t had an appraisal done or an official estimate of repairs (yup, I’m a complete amateur - looking at this as a home not an investment). But I’m guessing the ARV would be around 510-520k, and the home inspector gave an inflated repair estimate of 75k (should be half that I’m thinking). Bidding starts at 410k - I could put in about half that max.
Wd appreciate the list you refer to!
How is your credit? If you are staying in the home, why not look into a rehab loan that converts to a normal loan once you are done with the repairs? This will save you from all the points and the hard money rates as long as you have the credit score.
My credit’s excellent. Where can I find out about that kind of loan? I understood that the 203k (?) loans could take quite a long time to process, which is not going to work in the context of an auction…
203k is for owner occupants. Are you keeping this property after rehab? You wouldn’t want to get an appraisal done in this situation because you might not get the property. There may already be a recent one if this is coming from an auctioneer company. I will send you a PM with a list of HML’s and contact info.
Hi, yes, this property would be my primary (and only) residence. Why wouldn’t we get the property if we did an appraisal? We know the owners and they have given us permission to do one - except I’m a bit concerned to do it now because the yard is overgrown, house needs tidying, that kind of minor stuff that could still have a major negative impact on the appraisal and blow the mortgage out of the water. My plan would be - if we got the high bid at auction - to go ahead and do that tidying before the appraisal. (Also needs a full repaint and new carpets but can’t really do that beforehand.)
It’s a law firm heading up the auction (foreclosure) - doubt they’d share the appraisal if there was one?
Any further advice welcome!
Thought I’d clarify a couple of things to see if you can give me some further advice:
I would not need finance for the rehab part, only for the purchase. The only things that need doing before we could move in would be new paint and carpets (looks like two 6 year olds and a dog were held prisoner there for a month) and a couple of windows to be replaced. Apart from the paint and carpets it is all visually in pretty good condition (1996 construction). The rest (and again, nothing really major - the 75k estimate is kinda misleading) can be done over time.
I’m confused at what the mortgage company is telling me, which is that even if the property meets appraisal (I’m very confident it would), then I still might not get the mortgage. This is what they said:
“the problem is that the appraiser will take pictures inside and out. These pics would be submitted to the underwriter and they would probably not approve it especially if comparable properties are not in the same condition and look better. It’s considered deferred maintenance which is not looked upon favorably by our underwriters.” But they say we can try it.
I don’t get it. “Comparable properties” in better condition would cost more. And I’m not asking them to finance the rehab.
Any thoughts? Thanks!
ps. Do all mortgage companies require a purchase agreement before they can look at the appraisal and say yes or no to a mortgage? If not, the owners said they would allow us to do an appraisal at any point.
Hard money is out of the question if your an owner occupant. When I said “You wouldn’t want to get an appraisal done in this situation because you might not get the property.” I mean, don’t spend $350 on an appraisal if you aren’t sure that you will even get the property.
Normally in auctions they require a deposit within an hour or so after the highest bid. Then 30-45-60 days after, you close on the property and pay the rest of the purchase price. This will give you plenty of time to get a 203k. It’s hard to get a conventional loan on a property that needs work because if you got in trouble financially, the bank would have a hard time reselling in foreclosure.
There are several lenders depending on your credit score that will give you just about any intrest rate that you would like, I am in contact with several lenders that have various products.
dri,
The purchase contract would be to get the loan into underwriting. Does it need new carpets or is it bare floors? I have been doing a lot of loans in Prince George and Montgomery county lately. I do not see why you would not get the loan for just the mortgage if you have excellent credit. If they are just old carpets and bad paint jobs…it won’t show as nice, but you can still do a 100% purchase on the property. If things do not work out with the company you are talking to or if you have any questions, feel free to call or email.