I currently own my own home and have about $70,000 equity in my house. I can’t however, get at the equity because I have poor credit (under 600, bankruptcy last year) and probably would show my debt to income ratio is too high. Only a couple of small revolving accounts, but a car payment and a hefty mortgage payment.
I want to begin investing, may have found a good prospect for a first fixer, and would like suggestions on how I can make this happen. This is lakefront property with what sounds like a motivated owner (hasn’t even listed yet, but my friend lives next door to the property and has heard the owner say he wants to dump it --it’s had renters and is frequently empty–and what price he would like to get).
Yes you can do this loan, you can go up to 85% ltv maybe more on your home going Stated, with no bk in last 12 months. With a Stated loan dti is disregarded. If your dti is 50% or under you can go full doc up to 90%.
Even with bad credit, there are plenty of subprime lenders out there that will get you financing to access your equity.
Another option is to see if the guy is willing to sell on owner financing which means you don’t have to work with the bank at all. If he’s been renting it for a while, he may have a substatial amount of equity in the house and be willing to do it.
Oh by the way. If he won’t, many of the subprime lenders will offer 100% financing even on investment properties.
Keep this in mind as well. Why has he had problems renting the place? Is this really such a good investment? A little more research could reveal a lot and save you a lot of heartache.
Very good question. We’re going up to talk to the current renters soon to ask some pertinent questions.
All I can think of is that it’s a little out of the way and although the location is beautiful, it may have been too much for a normal commuting family. It would be incredible vacation property.
Anyway, thanks. And as far as the lenders go, when you say “subprime” – any specific companies, or are there a boatload of them out there?
You know, your subprime lenders are going to be the mortgage brokers. they will have access to a lot of the subprime investors. Just be careful.
There are a lot of shady brokers out there that take advantage of subprime customers. Make sure you ask a lot people you trust for a good referal. A good place to check is with any realtors you know or even through the title companies. The title agents get to see all of the fees being charged and can probably give you a good referral.