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Old 06-03-2015, 12:26 PM
 
8 posts, read 9,133 times
Reputation: 13

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Hello everyone-

Our situation is such that we're taking equity from our home in San Diego, and buying a house for cash in Phoenix. It's a long story, so let's forgo the discussion of whether it's a good idea or not.

We found a house we both love. The owners have accepted our offer, pending the sale of our current home. we live there now and are paying rent, 1/3 of which goes to purchase of the home.

Here's the rub: We are probably going to be $10-20K short, maybe a little more. We can't qualify for a mortgage, because our credit and employment history are trashed (advice: if you get a tumor, be rich...). You'd think it would be no big deal to get a mortgage for that small amount, right? wrong. predatory lending laws prohibit it. plus the costs of setting up the mortgage are a very large percentage of the loan itself at these amounts.

and we can't ask family, because, well, another long story.

There must be options out there, right? for the life of me I can't seem to find any.

anyone?


Thanks!

Ragnar
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Old 06-03-2015, 12:55 PM
 
Location: MID ATLANTIC
7,598 posts, read 17,614,249 times
Reputation: 8078
You can get a hard money loan, but for 20K? Expect to pay at least 8% and several points (low loan amount).

Hard money lenders don't care about reasons, its all about ROR. You may have better luck telling them it is NOT a primary residence (this is the ONLY time you will see me post not to be honest), as investment loans are not subject to QM.
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Old 06-03-2015, 01:13 PM
 
3,317 posts, read 7,251,326 times
Reputation: 4095
Gotta ask, if you can "take equity" from the house in SD, how are you qualifying for that? Are you max-ing out an existing Line of Credit (HELOC)? Or doing a new transaction?

Also, what are the terms of the SD transaction? Is there wiggle room to manipulate terms, ie., slightly higher rate so that you can facilitate lender-paid fees and get more cash in hand?

Also, if you are involved in a Lease-Purchase scenario, that might indicate that the seller is not cash-poor and could perhaps offer a Private Mortgage to you?

Last edited by Pfhtex; 06-03-2015 at 01:24 PM..
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Old 06-03-2015, 01:58 PM
 
8 posts, read 9,133 times
Reputation: 13
Sorry, what I meant was, we're taking the equity we have left in our current home by selling it.

I like your last idea of asking the seller to carry a little. They might be motivated if it looks like we're walking away.
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Old 06-03-2015, 03:12 PM
 
12,405 posts, read 9,195,957 times
Reputation: 8856
Quote:
Originally Posted by R. Danneskjold View Post
Hello everyone-

Our situation is such that we're taking equity from our home in San Diego, and buying a house for cash in Phoenix. It's a long story, so let's forgo the discussion of whether it's a good idea or not.

We found a house we both love. The owners have accepted our offer, pending the sale of our current home. we live there now and are paying rent, 1/3 of which goes to purchase of the home.

Here's the rub: We are probably going to be $10-20K short, maybe a little more. We can't qualify for a mortgage, because our credit and employment history are trashed (advice: if you get a tumor, be rich...). You'd think it would be no big deal to get a mortgage for that small amount, right? wrong. predatory lending laws prohibit it. plus the costs of setting up the mortgage are a very large percentage of the loan itself at these amounts.

and we can't ask family, because, well, another long story.

There must be options out there, right? for the life of me I can't seem to find any.

anyone?


Thanks!

Ragnar
You might be able to just get an unsecured loan. Credit unions, or even Lending club or Prosper might work.

Don't worry too much about the interest rate, because you'll still be paying only a small amount, and once you credit is improved you could get a home equity loan to pay it off.

Hard money is fine too. Just bite the bullet and pay the ripoff fees. Better than having to rent and move twice - and again, once your credit is cleaned up you can get a loan to pay it off.
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Old 06-03-2015, 03:16 PM
 
Location: Boise, ID
8,011 posts, read 22,499,039 times
Reputation: 9212
If the owners would carry a bit, that'd be fantastic.

I'm assuming you don't have any retirement savings you could tap into, even if there is a penalty.

Other than that:
Have a garage sale and get rid of extra stuff / or sell stuff on Craigslist
Sell vehicles and ride bikes
Pawn jewelry or any collections of anything you have
Sell plasma
Max out credit cards

I don't know that any of this is going to be enough to get enough, but if you are close enough that every little bit helps, those are some ideas. I wouldn't necessarily recommend some of these things, since regardless, you are going to end up really cash poor, and if you max out the cards you have nothing left for emergencies.
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Old 06-03-2015, 03:58 PM
 
203 posts, read 196,573 times
Reputation: 404
What about buying a home you can actually afford? You do not have enough money for this house. Period. What happens if you sell everything and max out all of your credit and something happens? You won't even be able to feed yourself, let alone deal with home repairs, illnesses, accidents etc. Getting in that far over your head with no safety net is asking for trouble. You may have been blinded by the expensive house, but take your head out of the clouds and be smart!
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Old 06-03-2015, 04:22 PM
 
Location: Denver CO
18,972 posts, read 10,032,914 times
Reputation: 27745
Quote:
Originally Posted by JNR417303 View Post
What about buying a home you can actually afford? You do not have enough money for this house. Period. What happens if you sell everything and max out all of your credit and something happens? You won't even be able to feed yourself, let alone deal with home repairs, illnesses, accidents etc. Getting in that far over your head with no safety net is asking for trouble. You may have been blinded by the expensive house, but take your head out of the clouds and be smart!
This.

Sorry. But there are lots of things to love in this world, and you can't afford all of them. From the sound of it, you can't afford this house.
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Old 06-03-2015, 10:52 PM
 
Location: NC
502 posts, read 649,964 times
Reputation: 1114
I'm a little confused. You are selling one house because you are buying another. But, you already live in the other house and are paying rent (to own). You have a contract, an actual contract, to buy the (rental) house you are living in, BUT you don't actually have enough money to buy the house. You signed a contract at a certain price knowing you didn't have enough equity in your other house to pay for it.

What was your plan exactly?

I think you should ask the sellers RIGHT NOW if they will carry the $20,000 note for you. I think you should tell them immediately that you do not have the money because if you have no reasonable way to come up with $20,000, then you are defrauding the sellers. You do not have the means to follow through with the contract and you know it.

I would look into the hard money loan (I am not familiar with those) immediately and if you can't get one you need to let the sellers know right away so they can either decide to carry the loan for you, or find you in default of the contract and evict you.
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Old 06-04-2015, 08:46 AM
 
Location: Boise, ID
8,011 posts, read 22,499,039 times
Reputation: 9212
Quote:
Originally Posted by jojow View Post
I'm a little confused. You are selling one house because you are buying another. But, you already live in the other house and are paying rent (to own). You have a contract, an actual contract, to buy the (rental) house you are living in, BUT you don't actually have enough money to buy the house. You signed a contract at a certain price knowing you didn't have enough equity in your other house to pay for it.

What was your plan exactly?

I think you should ask the sellers RIGHT NOW if they will carry the $20,000 note for you. I think you should tell them immediately that you do not have the money because if you have no reasonable way to come up with $20,000, then you are defrauding the sellers. You do not have the means to follow through with the contract and you know it.

I would look into the hard money loan (I am not familiar with those) immediately and if you can't get one you need to let the sellers know right away so they can either decide to carry the loan for you, or find you in default of the contract and evict you.
I'm guessing they didn't know what the sale price of their prior house was, and when they finally sold it, got less than they hoped to get.
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