Consumption and Real Estate
Question for mortgage lenders and brokers?
Question : Question for mortgage lenders and brokers?
Can you borrow additional money on top of the normal cost of the house? For example, let’s say I buy a house for $ 100,000. I put down 10%, or $ 10,000. So, my mortgage would be for $ 90,000. Then, let’s say I want to redo the kitchen and bathrooms, paint, put a new roof on, etc. and it will cost $ 30,000 to do that. Can I just add the $ 30k into my mortgage and borrow $ 120,000?
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Best answer:
Answer by Carolinahomerates.com
FHA Rehab will be the only loan that will allow this…………FHA 203K ..not many lenders do this loan though.
You’re only allowed to use the money for certain upgrades
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#2 written by matzael 1 year ago
Sure. You can either go the FHA 203k loan route, or you can apply for a ‘spec loan’ based on the speculated value of the house after the upgrades. The first step is to contact a few mortgage brokers or local banks and see which programs they offer and obtain your pre-approvals for these loans.
Either way you’ll need an appraiser to come and estimate what the value of the property will be with the repairs and get estimates for all the work you want done. Typically the funds for the repairs are placed in escrow until the work is completed and then is paid directly to the contractors for services provided. -
#3 written by John S 1 year ago
the mortgage company that i used to work for would do that if:
- you had plans and specs for the upgrades to the kitchen and bathrooms
- you had a home builder/remodeling company lined up and ready to go
- if the upgrades would warrant an increase in the appraised valuebut, the minimum deposit into the purchase transaction would be 10% of the estimated value of the home AFTER the work has been completed so instead of 10% of 100k you would be looking at 10% of $ X.
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#4 written by Ron B 1 year ago
I AM NOT AN ATTORNEY. I AM NOT A REAL ESTATE BROKER OR AGENT. I AM NOT AN ACCOUNTANT.
It all depends on how much the propertyt appraises for – in its present condition.
There are government programs for fixing up existing owner-occupied properties. If I eccall, no loans will be made available for at least 90 to 120 days after closing/settlement/escrow. Its worth looking into, isn’t it?
These are under F.H.A. or HUD mortgages or loans.
Thanks for asking your Q. I enjoyed taking the time to answer it.
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FHA, Fannie Mae, and Freddie Mac ALL have a program like that. It’s set up just like a construction loan, and there are restrictions. One of them is that (in most cases) YOU cannot do the improvements, and they aren’t just going to cut you a check for $ 30K. You have to hire a general contractor, and for certain improvements a licensed professional (such as electrical work).
If you are in the Carolina’s, I do these kinds of loans. If not, contact your local area bank or broker. If they don’t know about the programs, or they tell you they can’t do it, you’re talking to the wrong person!!!