Quick and dirty, I am trying to buy a foreclosure that should appraise
for around 350,000-400,000 and the sale price is 225,000. The house
was originally purchased for 370,000. It needs about 15,000 in work.
What I want is opinions on an idea I have. Can I finance the house for
say 270,000 and tell the bank I am using the excess for repairs? I
would like to get enough for repairs and to pay off a my truck along
with some other debt. Is there a rule against fincancing a house for
more than the sales price. It would still be a LTV of less than 80%.
Can this be done without having to get a loan and a home equity loan?


What are you opinions on this idea? Is is possible? Is is a good idea?

wrote in message
oups.com...
Quick and dirty, I am trying to buy a foreclosure that should appraise
for around 350,000-400,000 and the sale price is 225,000. The house
was originally purchased for 370,000. It needs about 15,000 in work.
What I want is opinions on an idea I have. Can I finance the house for
say 270,000 and tell the bank I am using the excess for repairs? I
would like to get enough for repairs and to pay off a my truck along
with some other debt. Is there a rule against fincancing a house for
more than the sales price. It would still be a LTV of less than 80%.
Can this be done without having to get a loan and a home equity loan?


What are you opinions on this idea? Is is possible? Is is a good idea?

that's the idea behind cash-out mtgs. you can borrow up to (if some bank
will lend it to you at the interest rate you want) the assessed value and
perhaps more. you don't have to tell them what the excess is for.

writes:
Quick and dirty, I am trying to buy a foreclosure that should appraise
for around 350,000-400,000 and the sale price is 225,000. The house
was originally purchased for 370,000. It needs about 15,000 in work.
What I want is opinions on an idea I have. Can I finance the house for
say 270,000 and tell the bank I am using the excess for repairs? I
would like to get enough for repairs and to pay off a my truck along
with some other debt. Is there a rule against fincancing a house for
more than the sales price. It would still be a LTV of less than 80%.
Can this be done without having to get a loan and a home equity
loan?

It's both likely to be possible and a decent idea, given that we are
enjoying historically low rates presently and that the interest is
generally tax deductible.

The big "if" is whether it'll really appraise out for 350k-400k if
you're managing to buy is for 225k.

HOw this will actually go down might be tricky. Will you have to buy
it with one mortgage then turn around and do a cash out refi? Will it
really appraise for 350k-400k if you are managing to get it for 225k?
Lots of questions. If you hunt up an experienced loan broker who has
done a good deal of foreclosures before, they'd be able to guide you
better.

..


--
Todd H.
http://www.toddh.net/

Am I the only one having a hard time believing anyone is gonna sell a
house that will appraise for $350-400K for $225K? If the house is
really worth anywhere near $350K, then why would they? Even if that's
all they are owed, it's hard to imagine they would. And it also raises
the question of why the owner would let it go to foreclosure, instead
of a market sale at say $290K, which should have been easy to do
quickly, if it's really worth a lot more.

The problem with the house is that the builders that started out in the
neighborhood built these huge houses on a lake thinking the market was
there. It was not. There is a huge cracker jack neighborhood a half
mile away where people could get 2500-3000 sq ft houses for
270,000-300,000. This house and all the other houses range from
300-6000 sq ft and were originally on the market for anywhere from
375,000 to 600,000. Alot of builders went under and the houses were
repoed. Most of the houses sat there for several years with no
interest. In the last 6-8 months the cracker jack neighborhood maxed
out and finished construction. The neighborhood is now picking back up
and all of the empty houses are selling for 350,000 to 500,000. Many
of the lots that sat empty are now being constructed on and the
neighborhood is expected to be built out within a year or so.

I talked to the agent again and she said the appraisal is probably in
the 320,000-350,000 range right now so my numbers were a bit high. I
finally found out the house originally went up for sale at 249,000.
There was no interest for a couple months so they dropped it to
224,000. Unfortunately, at the same time I submitted my full price
offer, two investors did the same "supposedly" so we were all asked to
submit best and final offers. I went to 231,000. Then I hear today
the seller has asked the listing agent for a market analysis. Only
thing we can figure is they are wondering why they would get three full
price offers at 224,000 and nothing at 249,000.

I am still waiting to hear. Thanks for the responses.