Me and my girlfriend want to buy and renovate a house. We want to get a mortgage that rolls in an extra 50 to 65 thousand dollars for renovations. Does anyone recommend a specific program or lender? (besides the FHA 203k)
There may be some type of construction loan programs available for you. I have used (re-)construction loan programs where the bank lends the money for acquisition of a property, and based upon a construction/rehab estimate you provide, they escrow funds for construction that you draw upon as needed
In order for this to work, the bank took the renovation estimates (had to be a licensed contractor) and ordered an appraisal where the appraiser gave an "after repair value" of the home. The bank would then lend up to x% (80% in my case) of the after repair value. I used a bank local to my area, which is probably where you will find a program like this if it is even available given the current market climate.
Alternatively, if the numbers make sense, you could try a hard money lender. These are private lenders who loan on buy/rehab/resell or refinance projects all the time. They typically charge higher rates, up front points, and have terms where you pay the full balance within 6mos – 2 years. They often loan up to 60-70% loan-to-value and don’t care as much about credit scores as long as the property values are there, because they can recoup their loss by foreclosing if you default on the loan. These loans could make sense for you, again, if the numbers make sense, and if you can refinance it after the work is done (if you want to stay in the house).
For the program I used on a few occasions:
So, as phase 1 of the rehab completes, you submit a request, and they disburse funding to you, thereby increasing your principal balance by the same amount. Most of these programs are interest-only during the construction phase and the principal balance is due at the end of the construction phase (6mos – 2 yrs, depending), although one program I used converted to permanent financing at the end of the construction phase for smaller fees than refinancing.
A lot of info, but I hope that helped.
Good luck.
I pay my home mortgage to American Home Mortgage and I just saw online today that they are filing for bankruptcy.
it means nothing to your obligation to pay. keep paying on time and in full.
the loan will belong to someone after all the dust settles and they’ll still want all the money promised.
there may be paperwork fun for AHM, its trustee in bankruptcy, etc. .. but that isn’t your worry.
***
Btw, most of the mortgages outfits like this service are actually sold to someone else … you simply aren’t told of that because you do not need to know — the servicing outfit handles it.
it may be that a new servicing outfit will be chosen somewhere down the road. if this happens, you’ll be told in writing in plenty of time to change the name and address you send your payments to …
if/when that happens, I recommend continuing to put AHM’s name on the check for a few months but to use the new address. If it really has been transfered to the new outfit, they’ll have authority to use AHM’s name for a bit. If it is a scam on ‘official’ letterhead, the scammer will have to lie to his bank to get the money and then you’ll be able to get it back afterward.
Can’t be too careful these days, i’m afraid.
Who are the people that are defaulting on their mortgages? which companies (industries) are involved in this?
Additionally does this go on in some regions more than in others?
what effects does it have on the economy and our daily lives?
what can be done to prevent further morgage defaults and fix the tumbling economy?
what shouldve been done earlier for this crisis to never have started?
what will happen if this problem isn’t fixed in the long run?
Defaulting on a mortgage means you do not pay the mortgage for which you are a borrower.
Sub-prime mortgages are to borrowers that do not qualify for a "prime" mortgage due to poor credit (this can either be a lack of a credit history or poor credit history).
All groups are defaulting on mortgages; however, sub-prime borrowers make up a significant percentage of these, especially those who took out Adjustable Rate Mortgages (ARMs) over the past few years. Many of these mortgages reset earlier this year when rates were higher, resulting in substantial increases in monthly mortgage payments. Often increasing beyond the borrowers’ means.
This is occurring across the country, but most predominately in places like Florida, Nevada, and California.
As for the effect on the economy, this is having a big impact. It is resulting in higher foreclosures, which is resulting in negative pressures on home prices. It has caused a tightening in the mortgage markets, with mortgages currently more difficult to obtain and the more "exotic" type mortgages are nearly impossible, and the markets have been impacted as investors are concerned about bank losses and the availability of money. The impacts are quite numerous, but those are some examples.
Underwriting standards need to remain tight. ARMs need to continue to be underwritten based on the borrowers’ ability to pay, AFTER pricing adjustements. As for the economy, the Feds will need to continue to balance growth with inflation. This will be difficult due to rising energy costs which are driving up prices, while at the same time placing downward pressure on growth (much like stagflation in the 1970s when growth was slow but inflation was high).
The underwriting of mortgages should have been much more strict the whole time. People got too carried away with 100+% finanacing, ARMs, and I/O loans.
In the long run, if not fixed, foreclosures will continue to rise and the residential market will bring the economy into a recession.
Good luck with the rest of your homework.
I am not looking for a mortgage company. I am looking for a direct lender with a wholesale division. Thanks.
Check out JLM Direct. The 100% Non-Owner is one of their nich products. My buddy is an underwriter there…
www.jlmdirect.com
Kevin 866-562-6838 x 106
Kruorock@firstratelending.com
www.firstratelending.com
- Jamie Gorelick – Built Clinton’s wall that protected Al Qaeda pilots when they were taking flight lessons IN THE US while Bill was president. She earned $26 MIL as Vice Chair of Fannie Mae.
- Franklin Raines – Clinton’s budget director. Earned over $50 MIL as CEO of Fannie Mae but had to return $20 mil. and resign for false accounting.
- Rob Rubin – CEO of Citicorp. Earned over $20 MIL at Citicorp, a key lender/player in the subprime mess.
Do Dems truly believe CEOs should never earn over $1 million … even if the CEO donates a ton of money to the DNC?
No. They will probably get pardoned somehow.
Ask Marc Rich …………………………………………..
whats the difference between the two? what are examples of second mortgages and first mortgages? thanks!
A first mortgage is simple. It’s the first mortgage gotten on a property. It is typically the largest one.
A second mortage is jsut a secondary lein to the title of the home. The best known type is a Home-Equity loan. There are a few others, but that is the best type.
The big difference is if the home is foreclosed on, the first mortgage is paid first. Any money left would go to the second mortgage company.
I just had a friend commit suicide because he could no longer pay his mortgage. His lender refinanced his home five years in a row with his payments going from 600 per month to over 1400 per month. The house was biult in the 1940’s and was only 800 sq feet. The lender knew he was on disability and had fixed income with no other assets.
Yes, there were other issues like his disability and his cancer, but when he could no longer afford his home he just gave up.
I’m very sorry to hear about your friend’s suicide. This is a very sad story.
It sounds like the lender was horrible.
I think you would have a hard time finding a lawyer to take the case. My experience is that lawyers only want to take case that they know they will win.
Usually people re-finance their homes to lower their monthly payments. I can only speculate that your friend had an adjustable rate mortgage. (Mr. Greenspan was a big fan of adjustable rate mortgages at one time.)
Good luck.
My hubby and I are working on improving our credit to become homeowners. Once I was told you needed to have a good mix of credit on your report to show you are responsible in all areas. We have two car loans, several student loans, and various other items.
We don’t have any credit cards, don’t really have a need for them. But everything I hear says you should have some revolving credit to show responsibility. I don’t want to get a credit card just for the sake of having one unless absolutely necessary.
Anyone with mortgage approval know anything about this?
I have been approved for several mortgages. No one has ever said that you need revolving credit, but I did read that it was needed. I got a credit card with a very high limit, simply to show responsibility. I have never used the credit card, so maybe you should consider applying for a credit card and restricting its use.
We are thinking of purchasing a house from my father. Instead of using a mortgage broker or bank, he suggested using a lawyer to set up monthly mortgage payments directly to him. We would still buy the house, and it would be in our names, not renting. How are payments like this calculated? Also, it seems this gives us flexibility and saves us money, but isn’t as secure. What are the specific down-sides to this?
Go thru a Title Company for the closing and have them prepare a amoritization schedule for you …..
i have to get that started on my own. I have my home insured through my car insurance but how do i set up paying for taxes in dekalb county ga
homeinsurance.awardspace.us – try this one. Got my home insurance from them. As I know they provide such a service.