I am in the process of starting to look for rehab homes and I have VERY limited funds and my credit score is 650. How hard is it to find a HML to do 100% financing on my rehab job? I had a meeting today with a so called real estate agent/investor and she told me that HML’s require at least 10% down on the purchase. But I have seen on these posts that people have gotten 100% financing (even on the closing cost). So is it safe to say that there are HML’s that do a true 100% financing on rehab investing? Oh, and another thing. This agent wanted to to buy a house and stay in it for a year to build up equity so I can have more money for my investment. How does that sound for advice? Any help will be helpul
You can get between 90-100% HML it is just who you deal with
You need to deal with a mortgage broker that specializes in investor loans and invests them selves because if they invest them self I can almost gaurentee they are not putting 10%
I know the people I use in my state(Utah) actually will pay the earnest money for me too. ;D
Plus it is all about building relationship with HML too.
It so competive with HML that you should not worry about getting what you need just negotiate or have your mortgage professional negotiate for you it they are not doing that for you get away from them >:(.
From what I have learned HML’s will normally lend 65%-75% of FMV. If you rehabin’ you are probably only paying 65%-75% of FMV, or ARV. They base the loan off of the property value, not your credit. If you default then they can still realize a profit.
Good advice to develop relationships though, get on the phone (you can search for many on-line) and I am sure that they will compete for your business.
Yes 65-80%ltv is correct as far as the Value that is lent against the collateral
All I am saying is that out of that can you get 100% of that money and not have to come with 10% or less to the table and dig in your pockets for the money.
For example you are buying a 100k property for 65k
you roll in the cost of the points let say 5 points and other closing costs
roll in holding costs of 12% interest for 6 month $4800
your total loan is for 75k
There you go there is a ture 100% loan base on a 75%LTV.
Thanks for the straight forward answer,I have been looking for this for a week or so, glad I was browsing the forum,this really helps us carpenters who are making a career change,God bless you rmb
Rehabbing should be a great career change for you