I have spoken with my banker that financed my last loan (6%, 10% down, 2 points buy down, totals about 7K out of pocket to buy 44K property). I asked about an 80% ARV, and he wasn’t familiar with the term. He told me it sounded like a 201K loan, where I could be financed the fixup cost. Is this the same thing? If so, he says I would still have to pay 10% down, a couple points, and closing costs out of pocket with 6 months reserves in the bank. I can cover all this, but not for very many loans. My idea of the 80ARV was that it would be no money out of pocket. Am I misguided on this? Anyone who has actually dealt with this please respond. Anyone else, please let me know your info is “as you understand it” so I can differeciate b/n the two.
Thanks a lot for any help.
On this type of loan, you should get cash back at closing, as opposed to bringing money to closing. A ‘normal’ lender will not have this type of program which is probably why your lender is not familiar with the ARV term and is telling you that you will need 10% down
ah excuse me folks, 90 % financing on the ARV after repair value is available, (100k purchase 50k in repairs 135k loan plus closing costs no points, and no payments for the 1st 6 months)
buckeyes58- i think you mean an fha 203k loan great for primary res. rehabs.
You need to shop places other than a bank. They a conservative and usually don’t understand investors. I have several local private money lenders who will make short term, ie 4-12 month loans for new construction or rehabs. They base the loan on ARV, and vary form 65-80% ltv, 8.5-13.0% interest, and 3-6 pts. Pick up the phone and start calling mortgage brokers or anyone who advertises money to lend. Its well worth your time. Good Luck!
Hey now mortgage boss! You need to do some more homework The “bank” that I was referring to offers some of the most aggressive investor programs I have ever seen, and these conventional mortgage loans are competitively priced and similar to market rates with an investor hit! These are not “rate abusive” or “point happy” like hard money or short term finance! They even have 0 down non owner occ financing and they are licensed nation wide, so if I find a hot market in my back yard or in yours I only need to contact them for the same products or services.
100k purchase 50k in repairs 135k loan plus closing cost! that’s a 90ltv! And i make no payments for the first 6 months. 30 year fixed rates NOT 8.5 to 13% and your paying 3-6 points? Call the police i think Mortgageboss is getting robbed of all his profit!!!