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We have a contract on a house that needs a new roof. Seller has offered to lower the house's price by the price of the new roof, but we don't have the cash for a roof on hand at the moment. I've read here that one solution to this problem would be for money for the repairs to be put aside into an escrow account at closing, but our lender, Patriot Bank, says they don't do this anymore.
Is this a new trend in lending? Will I be able to find another bank willing to allow money at closing for a roof?
(Also, I understand that appraisal could be a problem, but I don't think the roof is so bad that it will not pass appraisal).
You have to understand it from the lender perspective. They have a financial investment in the property just as much as you do. They don't want to invest in a property that needs major repairs such as a roof because what is to say that you never bother repairing the roof. Generally, the roof would need to be repaired/replaced before you purchase the house.
We have a contract on a house that needs a new roof. Seller has offered to lower the house's price by the price of the new roof, but we don't have the cash for a roof on hand at the moment. I've read here that one solution to this problem would be for money for the repairs to be put aside into an escrow account at closing, but our lender, Patriot Bank, says they don't do this anymore.
Is this a new trend in lending? Will I be able to find another bank willing to allow money at closing for a roof?
(Also, I understand that appraisal could be a problem, but I don't think the roof is so bad that it will not pass appraisal).
What kind of loan are you doing? What is the price, how much is your down payment?
You can switch to an FHA 203k loan OR a Conventional rehab loan. Or the seller can have the work done, raise the price by an agreed-upon amount, then at closing the contractor is paid from the seller's proceeds.
This is not a "new" trend. This has been the trend for a few years. Banks do not like escrow hold-backs and neither do the title companies.
The seller needs to go ahead and replace the roof, with a company that allows payment at closing. That is very common. Roofing companies do that all the time.
We have a contract on a house that needs a new roof. Seller has offered to lower the house's price by the price of the new roof, but we don't have the cash for a roof on hand at the moment. I've read here that one solution to this problem would be for money for the repairs to be put aside into an escrow account at closing, but our lender, Patriot Bank, says they don't do this anymore.
Is this a new trend in lending? Will I be able to find another bank willing to allow money at closing for a roof?
(Also, I understand that appraisal could be a problem, but I don't think the roof is so bad that it will not pass appraisal).
Buy the house at original price but ask the seller for a credit back to cover repairs after closing. Just make sure it's written and agreed upon.
Or have seller repair it. This would be my choice.
When I bought my house, the seller did not have money to complete repairs and offered me cash from their proceeds from closing. We wrote a seperate contract and the seller gave me a certified check at closing - my mortgage company knew and did not say a word.
When I bought my house, the seller did not have money to complete repairs and offered me cash from their proceeds from closing. We wrote a seperate contract and the seller gave me a certified check at closing - my mortgage company knew and did not say a word.
Was this cash back on the settlement statement? Guessing not as it was on a "separate" contract. Why wasn't it on the main contract (the purchase agreement)?
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