You can get a 100% stated income loan that will include fix up costs with a 700 score. The factor for you will be the property itself. It has to be able to carry the deal and pay for the loan and remember when you do one of these deals, you probably won’t own a payment for 60 days or so. If you can get the house, fix it up and sell it before that first payment, you will not need any cash.
Some of the info you received may not be accurate.
The last replier commented that you could qualify for “stated income”. How does this individual know that you truly have the debt to income ratio, assets, and job history for this program. You cant just “state” an income which would make the loan work. There’s too many investors that have been mislead by loan officers who really dont have an understanding of the term “stated”.
With high enough scores there are several other “income” programs, like no ratio and no income. However, you still have to have assets to qualify. So if you dont have funds for down payment, I’d assume that means no money for the lenders minimim reserve requirement. In this case, if you dont have the income or assets, you’d need to do a no doc. There is not a 100% no doc loan for investment properties.
This leads back to your question about the hard money. They definitely serve there purpose as possibly in your case if you cant qualify for conventional financing. You will need to find the properties that are marked down to about 50-60%.
What area are you in? There are several lenders that may have better terms than what you have seen.
I think you may have missed the point I made about stated income.
It’s simple. If you put your monthly income on the loan application, would that be enough to qualify? If the answer is no, then you can’t use a stated program. The program is designed for reducing the documentation required, not to put in a $ value over what you make so that the ratios work.
How much in assests do you have? bank, 401k, other retirement, or investments?
Sound extra risky to me. I think people are starting to get eaten by the alligators.
With no assets and a part time job, you have no reserves in case the unexpected happens. What if the plumbing gives or there’s a flood? Lots of people were hit by local floods in Massachusetts recently. There hadn’t been a flood in their area for over 20-30 years and of course no flood insurance because they were hundreds of feet from a local river.
You didn’t really mention your income, just what is it from a part time job? Can you really carry the mortgage on your own if you can’t flip it quickly? What’s the typical days on market for your area?
I do have credit cards, a car loan, just no assesst. My income comes from my part-time job, and a few websites that I run.
I am not in debt nor is my credit bad, I pay all my bills on time, its just I dont have any savings, because my savings goes for college that I pay every semester.
I know I could wait a couple months and save some money, but this home seems like a great opportunity because the home needs NO rehab. Its in one of the best locations in Northern Virginia, and at the price range, it probably wont sit longer than 2 months. (I have to check with a realtor first)
I thought there was a loan program that you wont have to pay payments for a few months, but I understand the interest rate would be high.
I think we’ve established that conventional financing may be out of the picture. Income and assets will not work in getting 100% financing. Not to mention that the payments may not be feasible to make each month.
So you have a property, this wasnt mentioned before. You need to list some of the specifics.
Do you know the owner, would they be willing to carry part of the financing?
Since you are looking for a loan that includes the payments and may not be able to qualify for a conventional loan, then hard money or a private investor would be a solution.
A hard money lender will typically only fund 70-80% of the value. So you would need to have a purchase price that was within that 70% and also leaves room for the costs and payments to be worked in.
For easy #s let’s say that the home is worth $100,000. Max. loan 70% = $70,000
If the costs are around 6pts + $1,800 misc = $6,000
and you need payments set aside (4 months @14%) $3,300.
This would leave you with about $60,700 to purchase.
If the purchase prices was over that ,then you would need to bring funds into closing or have the seller hold a note for the balance.