okay say you found a house that smelled horrible and needed a lot of general repairs. you won’t be living in it.
you wouldn’t be able to do a regular mortgage loan, right?
what types of loans would you use for this?
what is a typical down payment % for something like this?
can closing costs be rolled into the loan, like some mortgage loans?
any other major differences between this and a standard, single fam, oo loan?
buuuummp
nobody here has ever gotten a loan on a property like that?
come on, i know someone here has to have encountered a situation like this, right?
Here I’ll help you out a lil bit.
What your looking for is a hard money loan.
With a lot of hard money loans, there is no credit check, and they based the loan on the value of the home.
They will give you about 70% loan of the MARKET value of the house, and if you get the home at a good price, you will have money for repairs to fix up the home.
The bad thing is that you can get charge A LOT of money for this type of loan.
I have never used it, but I think thats what your talking about.
Check out this website for additional information
http://www.rehabfunding.com/rehab_faqs.html
*I dont recommend this website, its just for informative purposes.
so there’s no way i’m going to be able to do any loans aside from HML?
my mom is closing on a hud house this month with a conforming loan. the mortgage broker told her that she had to replace the garage door before the appraisal, which was missing, but other than that the appraisal went well. the inside smells horrible, theres dog feces and such everywhere.
Why will you not be able to get a “regular” mortgage against the property, at least a NOO loan?
What type of “general repairs” are needed? Does the kitchen function? Do the bathrooms functions? Does it have a roof? Doors? Windows? In other words, does it still provide the basic function that it was designed for which is living? If so, then if your credit/income is worthy, you can get a “regular” investment type loan on the property.
As far as % down, interest rate, and closing costs, there are simply too many variables to say. Every lender, and every borrower, are different. Alot will depend on both as to those things.
Even if it is not inhabitable at the moment, you can still get a construction/rehab loan, again depending on credit/income. Once you make it inhabitable, then you can switch over to a more conventional type of loan.
Also there are non-conforming type of loans (again, too many different variables for great detail) that may also work in this situation, depending on the property and borrower.
Raj
how would i learn about ‘investment’ loans? i understand hard money, and i understand primary/secondary markets for residentials, ginne/fannie/freddie, etc etc… i can’t say i know anything about an investment loan, i think i used to associate that with hard money.
You really don’t need to “learn” about investment loans. It’s pretty simple. All you need to do is call a good local, preferrably referred, mortgage broker in your area that specializes in investor type loans and say, “I’d like a loan.” They’ll do the rest.
Raj
They will give you about 70% loan of the MARKET value of the house
Just a minor addendum to the above. Most HML’s will loan at 65-70% of the after repaired value of the home. Conventional lenders will usually only loan you based on what the property is worth in it’s current state. As DHLC has mentioned before on these boards, in a lot of cases, you could actually get more money via a HML than a conventional lender.
Check with your small hometown bank. They often do rehab loans @ 80% ARV. I work for such a bank and we do these all the time. Its much cheaper than a HML.
This thread is 8 months old… :flush
There is so much available. Hard money is not the only option. It depend on the extent of those repairs.