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Old 05-13-2015, 11:42 AM
 
3 posts, read 2,092 times
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3 years ago I bought a house on a lease option with basically half my payment going towards principle , put $25,000 down, I currently owe aprox $185,000 with Zillow estimating its worth $389,000 so I have about $200,000 equity basically. I went thru a BK 3 yrs ago and my credit score is 650-680. I want to buy this house with a regular loan but don't have any money to put down. I need to be able to move in 2 yrs, any ideas on lenders that may take on this type of situation, its basically a no risk loan with that much equity. I know Im not getting a prime rate. Oh yeah Im in california
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Old 05-13-2015, 12:07 PM
 
Location: Phoenix, AZ > Raleigh, NC
14,320 posts, read 17,538,176 times
Reputation: 22164
The zillow estimate is garbage. Nonsense. BS.

And it's not a "no risk loan". The lender doesn't want the house - they want the borrower to pay the loan back, as scheduled, so they make their income off the interest. They don't lend money out of the goodness of their heart or to eventually foreclose on the house.

First, you need to get an adequate assessment of what this house is worth. You might get a realtor to do a CMA (comparative market analysis) for you at no cost. You can start by using zillow to look at true comps (similar houses sold within one or less miles of your home in the last 3 months) yourself. Eventually, you'll have to pay for an appraisal to get the bank loan which will be the ONLY acceptable valuation of the house (regardless of what zillow says), but I'm betting that it won't ever come to that.

Others who are in the mortgage industry can comment better than I about the possibility of you ever getting approved for this loan.
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Old 05-13-2015, 12:45 PM
 
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Why are you betting it wont come to that
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Old 05-13-2015, 01:09 PM
 
Location: Southern California
4,350 posts, read 4,942,333 times
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A lack of cash reserves will be the challenge .
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Old 05-14-2015, 06:42 AM
 
Location: Phoenix, AZ > Raleigh, NC
14,320 posts, read 17,538,176 times
Reputation: 22164
Quote:
Originally Posted by saintsfan92344 View Post
Why are you betting it wont come to that
Because I'm betting you won't qualify for a mortgage.

Also - you mentioned you need to move in two years. Buying now is foolish - you'll lose a bunch of money.
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Old 05-14-2015, 08:30 AM
 
Location: Boise, ID
8,013 posts, read 22,543,362 times
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You said you bought the house as a lease option. But lease option isn't a type of financing. You are either leasing the house with the option to buy, in which case, you can't refinance, because you don't currently own; or else you own the house with normal financing, and the fact that it was originally a lease option is irrelevant.

My guess is that you don't have either of these. But I'll get to that in a minute. If you have one of these, here is my advice:

If you are still in a lease option, you don't need to refinance, you just need to exercise your option and purchase. The principal you've paid would now be your down payment. Shouldn't be difficult to find a lender to help you with that, assuming you qualify otherwise. If this is the case, you'll definitely want to do this, even if you are moving soon, since if you don't, you'll likely lose all your equity by not exercising your option to purchase.

If you have a normal loan, anyone should be able to help you with a refi, again, assuming you qualify otherwise. I wouldn't recommend this if you intend to sell in 2 years.



My guess is that what you really have is an "owner carry", where you own the house, and the former owner is acting as the bank and carrying your loan. Again, though, you would have equity. You don't need a "down payment" if you have sufficient equity. But again, I wouldn't recommend refinancing if you are going to sell in 2 years UNLESS the owner carry has a balloon clause (loan due in full after 5 years, for example) or says you have to refinance before you can sell.

And JKGourmet is 100% right about Zillow. I read somewhere that they figure if they are between 50% and 150% of the actual value, they consider that acceptable. So your actual value could be anywhere from $194,500 to $583,500.
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Old 05-18-2015, 01:57 PM
 
3 posts, read 2,092 times
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I have the option to purchase at any time for what remains unpaid, it was for 7 years figuring I could get back on my feet enough to purchase again within that time frame, purchase price was 225,000 with 25k down which was what the house appraised for 3 yrs ago. I can purchase at any time. Due to my work moving 20 miles further and already driving 42 miles I would like to move in a couple years and you are right I DO NOT want to lose my equity. I want to buy based on the equity I will have at the time of purchase. I am looking for advice on what type of companies might do that type of loan, my credit was good before the BK and I had owned 2 prior homes, so it sucks being in this position

Quote:
Originally Posted by Lacerta View Post
You said you bought the house as a lease option. But lease option isn't a type of financing. You are either leasing the house with the option to buy, in which case, you can't refinance, because you don't currently own; or else you own the house with normal financing, and the fact that it was originally a lease option is irrelevant.

My guess is that you don't have either of these. But I'll get to that in a minute. If you have one of these, here is my advice:

If you are still in a lease option, you don't need to refinance, you just need to exercise your option and purchase. The principal you've paid would now be your down payment. Shouldn't be difficult to find a lender to help you with that, assuming you qualify otherwise. If this is the case, you'll definitely want to do this, even if you are moving soon, since if you don't, you'll likely lose all your equity by not exercising your option to purchase.

If you have a normal loan, anyone should be able to help you with a refi, again, assuming you qualify otherwise. I wouldn't recommend this if you intend to sell in 2 years.



My guess is that what you really have is an "owner carry", where you own the house, and the former owner is acting as the bank and carrying your loan. Again, though, you would have equity. You don't need a "down payment" if you have sufficient equity. But again, I wouldn't recommend refinancing if you are going to sell in 2 years UNLESS the owner carry has a balloon clause (loan due in full after 5 years, for example) or says you have to refinance before you can sell.

And JKGourmet is 100% right about Zillow. I read somewhere that they figure if they are between 50% and 150% of the actual value, they consider that acceptable. So your actual value could be anywhere from $194,500 to $583,500.
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Old 05-19-2015, 07:42 AM
 
12,404 posts, read 9,218,311 times
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Quote:
Originally Posted by saintsfan92344 View Post
I have the option to purchase at any time for what remains unpaid, it was for 7 years figuring I could get back on my feet enough to purchase again within that time frame, purchase price was 225,000 with 25k down which was what the house appraised for 3 yrs ago. I can purchase at any time. Due to my work moving 20 miles further and already driving 42 miles I would like to move in a couple years and you are right I DO NOT want to lose my equity. I want to buy based on the equity I will have at the time of purchase. I am looking for advice on what type of companies might do that type of loan, my credit was good before the BK and I had owned 2 prior homes, so it sucks being in this position
FHA will allow it. Why not start contacting lenders now (as in, when you get off the computer?)

Some lenders may allow you to take a PLOC for the down payment, be sure and ask. And open the PLOC soon, because it may take 60 day seasoning of advanced funds before you can use it.

Is you income high enough to qualify in terms of DTI with both debts?
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Old 05-19-2015, 07:51 AM
 
10,276 posts, read 6,523,579 times
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Can you find a cosigner, buy it and then sell it as soon as you can get a good price for it?
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