home loan question

[bonnie&clyde]

i am planning on buying the house i currently live in from my mother in law, my question is, if we are not using any realtors or ppl like that are there still closing costs and things like that? my next question is lets say the she wants 70k for it, can i ask for 100k to fix up the house??? TIA

[sc281]

i am planning on buying the house i currently live in from my mother in law, my question is, if we are not using any realtors or ppl like that are there still closing costs and things like that? my next question is lets say the she wants 70k for it, can i ask for 100k to fix up the house??? TIA

Still are closing costs. The bank will most likely have you do most of it regardless to cover their ass. There aren't any realtors fees, obv.

The only way you'll get $100k is if she sells it you for $100k, and it appraises for $100k. Your mom would have to give you the money above her asking price of $70k. Keep in mind manipulating the numbers like that is prolly not going to go over well with the loan company if they find out what ypu are wanting to do.

[TexasT]

There are programs and specialized loans for what you are wanting to do. Do some googling on the subject and you will find what you are looking for. Then you can hunt up a mortgage company that does those type of loans. I have a guy we use if you are interested I can get his info to you.

I would stilll run it through a title company. I would still purchase the mortgage insurance and your mortgage co will probably make you any way. Have you thought of asking her to hold the note or does she need the cash for something else? A lease to own situation could be to.your benefit.

[8mpg]

The FHA has a loan program that does rehab loans and they base the house value on the house after the repairs. They can be a pain in the ass from what I read, much like a construction loan. You get installment checks as the remodeling goes forward and you show you are having the work done. Then you have to have all permits, all electrical and what not has to be done by a licensed pro, etc.

The bank will force you to go through a title company to protect their assets. You will have to pay title and closing fees as well as a bank title insurance policy.

Like sc281 said, you would probably be best off getting the house sold to you at 100k and having your mom give you the 30k back or write it into the loan that she provides all the remodeling with the contract of purchase.

[Vertnut]

The FHA loans that allow for future repairs are tougher to do. Check with SVT Lurch on here to get details. IF the house can appraise for $30K more than what mom wants (and that's a lot), why would she let you have it for $30k less? Make DAMN sure you have a great relationship with her, because once the deal is done, you will have no legal way to get that $30k if she decides to keep it.

[AdamLX]

Your main savings will be the 6% commission not being paid to realtors for helping you with the home sale.

FHA 203(k) is the rehab loan you are looking for. You will need documentation, quotes etc on all the work to be done. They can be a huge pain, but are useful. Bank of America still does these I believe (not many banks still participate).

There will still be closing costs from the bank and title company. If you do an FHA loan you will be required to pay Private Mortgage Insurance for at least the first five years you have the loan. The rate just went up to 1.35% of your loan balance / 12 months = your monthly PMI payment.

Also, have her track down her survey (not appraisal) on the home as you can probably re-use it and save several hundred dollars.

[bonnie&clyde]

The FHA has a loan program that does rehab loans and they base the house value on the house after the repairs. They can be a pain in the ass from what I read, much like a construction loan. You get installment checks as the remodeling goes forward and you show you are having the work done. Then you have to have all permits, all electrical and what not has to be done by a licensed pro, etc.

The bank will force you to go through a title company to protect their assets. You will have to pay title and closing fees as well as a bank title insurance policy.

Like sc281 said, you would probably be best off getting the house sold to you at 100k and having your mom give you the 30k back or write it into the loan that she provides all the remodeling with the contract of purchase.

well see thats the thing, the house is not valued at 100k its valued at 70k i just wanted the extra 30k to fi it up, i didnt plan on using all of it just what i needed to needed repairs, i will look into the loan yall talked about

[sc281]

well see thats the thing, the house is not valued at 100k its valued at 70k i just wanted the extra 30k to fi it up, i didnt plan on using all of it just what i needed to needed repairs, i will look into the loan yall talked about

No one is going to lend you more than the house is worth. Your best bet is to save up and do the upgrades/repair over time.

[AdamLX]

well see thats the thing, the house is not valued at 100k its valued at 70k i just wanted the extra 30k to fi it up, i didnt plan on using all of it just what i needed to needed repairs, i will look into the loan yall talked about

She sells for $70K, it appraises for $70K. That's normally how it works.

What you're looking for is buying for $70K, but doing $30K worth of upgrades on the home which would get you the $100K appraisal. In theory.

Issue is you won't add that much value to the home, or won't be able to get the appraiser to state that your planned improvements will add $30K in value. You're only real show at adding much value will be adding square footage to the house.

[Ruffdaddy]

So you are also just trying to swing some cash out of this?

[CJ-95GT]

^^^^^
He wants to do some upgrades and roll the cost into his mortgage.

[Ruffdaddy]

^^^^^^^^

well see thats the thing, the house is not valued at 100k its valued at 70k i just wanted the extra 30k to fi it up, i didnt plan on using all of it just what i needed to needed repairs, i will look into the loan yall talked about

[SVT Lurch]

What Adam said.

[Kimmypie]

We did the rehab loan & got 30k to do the upgrades. The hiring of the contractor was a pain in the ass, but Christian learned all he could from him & we are finishing the bathrooms & some little things on our own.

We used the 30k to totally remodel the kitchen & the master bath, enlarging the entry/door between the kitchen & the living room, laying slate tile in the entry, kitchen etc, along with fixing walls & stuff. We didn't add any square feet at all.