Are there investors willing to buy a house so I can rent it from them and then buy it when my husbands credit is better? (Craig: real estate, foreclosures)
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Are there investors willing to buy a house so I can rent it from them and then buy it when my husbands credit is better?
My credit is great but I'm only 23 so lenders say it's too "new" to count or I don't make enough money alone to qualify. My husband and I have been trying to rent a place or buy a place for 2 years now but we can't seem to find anything or get approved. We've been living with my parents and I appreciate them letting us live here but it's time for our own space.
We have 3 horses and need room for them aslo. I found a property that is in forcolsure and the bank is only asking 75,000. If possible I would also like to get extra on the loan to fix up the house and put up fence. (my husband works construction so he knows how to do everything)
If anyone can help please let me know.
Thanks!
There are several investors in the area who will do a variation of this scenario. The investor will have limits on the type of property and how the transaction will be structured, but it is certainly possible. There are also transaction structures that would allow for you and the investor to be better protected by the investor selling to you right away and then financing the purchase himself, eliminating the lease portion of the transaction.
Yes Molly, that is possible. Check Craigslist. And do a search for "rent to own" in your city on Google.
In your post, you mentioned "getting extra" when applying for a mortgage. Be aware that is absolutely impossible. Please don't spend time thinking about that. With few exceptions, unless you are a veteran and get a VA loan, you can't even get 100% financing - less alone get more money out of the transaction. There is something called a USDA loan that has 100% financing and some special regional programs, but that's about it. FHA is the next best option. For that, you must have 3.5% down and you might need money for closing costs if the seller doesn't contribute enough.
You must have heard about all the fallout, losses and foreclosures going on. So lenders are extremely cautious. You will not get a loan for more than the home is worth because they are not going to take on that risk.
You might have to try the "rent to own" option or wait it out and improve your debt to income ratio. Or work on your husband's credit - which you should do anyhow.
If the problem is income, you can't get around that unless you have other debts that you can pay down.
There are no easy mortgages any longer. You have to qualify and lenders are very unforgiving.
FHA has a loan called a 203(k) rehabilitation loan which will allow you to borrow an additional amount over and above the purchase price for renovations, repairs, or rehabilitation. The loan costs a bit more, but there is only one closing for both parts of the loan.
I appraisal is done on the property as it is, and then, based on the planned repairs and upgrades, another "as-finished" appraisal is done. If the repairs are worth it, the lender opens a line of credit similar to a construction loan for the repairs and repair costs are drawn on that credit. At the end of the project, the lender send a representative to the property to make sure the repairs were done and then rolls the repair costs into the original loan. The borrower is required to put down 3.5% of the total amount of the final loan.
This is a basic overview and there are further details, so when applying for one of these be sure to go over all of the details with the lender.
Last edited by Mike Weber; 02-05-2011 at 05:13 PM..
Reason: Clarification
FHA has a loan called a 203(k) rehabilitation loan which will allow you to borrow an additional amount over and above the purchase price for renovations, repairs, or rehabilitation. The loan costs a bit more, but there is only one closing for both parts of the loan.
I appraisal is done on the property as it is, and then, based on the planned repairs and upgrades, another "as-finished" appraisal is done. If the repairs are worth it, the lender opens a line of credit similar to a construction loan for the repairs and repair costs are drawn on that credit. At the end of the project, the lender send a representative to the property to make sure the repairs were done and then rolls the repair costs into the original loan. The borrower is required to put down 3.5% of the total amount of the final loan.
This is a basic overview and there are further details, so when applying for one of these be sure to go over all of the details with the lender.
You're on the ball Mike.
I forgot to mention 203K. But Molly you still need the 3.5% down.
One thing is your in the exact age bracket for a home loan. With a husband that also qualifies you are better then qualified. I am not sure who you talked to but I am going to guess you went to Wells Fargo or Chase.
First off lets dump the bank and housing lender. I want you to get in a Credit Union. Maybe through work or a family member. They are more prone to help you not only with the financing but also other advice.
Second, get a Realtor or real estate lawyer that knows rural law.
Next get the property appraised. Find out what your looking at for future repairs as well as finding out it's factual worth.
Next get a inspection maybe the house can be used as an asset for your loan or maybe repair costs can be implemented into the loan. Also the barn and water well. If those are not sound you need to address it. Knowing this may lower the cost of the property and at the same time your loan can be adjusted for the repairs.
Now back to the loan. A young married couple is the target group for home loans. I think that since you have been living at your folks you are lacking a rental history. That can be over come and a credit union is more in a position to advise you on what you may need to do then a bank is. Plus Credit Unions don't lie to you.
You may have to get rid of your other debt to be able to afford this place and still have a decent life. That's another thing a Credit Union will do. They can help instruct you and help you see if the mortgage and your other debts are feasible. It's stupid to be so far in debt that you have to live like your in the poor house. You need to know if your acting your wage. You don't want to buy a horse property and have to sell your horses to stay in the black. A credit Union will help you do these things. Also you may want to look into money management classes that can help young people starting out. Ask your pastor if the church offers them, often they do.
Remember that financial success dose not start with a million dollars. It starts with a intelligent people living with in their means. Allot of damage can be done to a relationship because of the stress of unneeded debt. I wish you the best of luck starting out your life. Your starting out on a great adventure as a family. There is gonna be hard times and harder questions but nothing is more special then when a man and woman grow together.
I agree Dewmik. A Credit union that does mortgages is a good idea.
On that 203K, Molly, you do not get cash in your hands. It's all handled via escrow. 203K programs can be tough & complicated, so proceed with caution on that. Lots of guidelines and minimum dollar amount of repairs must be done and the items that can be repaired must meet program guidelines.
BTW as the Title of this thread asks Are there investors willing to buy a house so I can rent it from them and then buy it when my husbands credit is better?
That is a very bad idea. Stupid bad. Stay away from this type of lender. It is legal but dishonest similar to pay day loans. DO NOT DO IT AT YOUR AGE. There are to may better options
Sell the horses. Save money to increase the down payment and reduce your payments on the principle, so you can qualify for a loan. Built equity; save more money and then when your are financially secure, you can get luxuries, like horses. That is what young, smart people have done for generations. If you want everything, all at once, then you will always be poor and foolish.
I grew up with frugal immigrants who saved, worked and got education. I see these same hard working new Americans all over Colorado--learn from their example and you and your children will benefit.
Thanks to all the people that think I'm stupid. I appreciate it....
I have helped my husband pay off $30,000 worth of debt in the 2 years we've been married. I know how to manage money, my husband was in big trouble when we met and that's why we are currently stuck in our situation.
A private investor is our only option because of our situation, I've exhausted all other options including, FHA, 203(k), government loans, and more I can't even think of.
"livecontent" Our horses are family not pets, if you don't have or like or know anything about horses you wouldn't be able to understand. Nice "advice" though. Not all people in there 20's are stupid just so you know.
Thanks Mike Weber, your information has been helpful!
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