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We want to downsize and move a little closer to work so, we’re selling our house ($199,900) and wanting to buy a local foreclosed home at around $50,000. All we want to do is, buy the foreclosure home before we sell our home that we do have on the market. The foreclosed home needs some repairs before we could move in. The problem we’re running into is that the mortgage companies and the bank want (20%) down and 6 months of each home payment in reserves in saving, because they think we’re buying it as an investment. But we don’t have that much cash on hand. We can afford both mortgages and also have at least enough to put 10% down.
The housing market is hurting, but there seems to be very little help to get market going.
Has anyone ran into this before and found a way to get a mortgage on a second home an easier way.
We want to downsize and move a little closer to work so, we’re selling our house (what we hope to be $199,900) and wanting to buy a local foreclosed home at around $50,000.
assuming the first home can sell sorta quick (wanna bet on that?)...
I wouldn't want to complicate that with a HELOC for a short term loan.
how is your PERSONAL credit now?
could you float the whole $50K and refinance or pay off the bridge loan AFTER all the dust has settled?
. . . we’re selling our house ($199,900) and wanting to buy a local foreclosed home at around $50,000. . . the mortgage companies and the bank want (20%) down and 6 months of each home payment in reserves in saving. . . We can afford both mortgages and also have at least enough to put 10% down.
Has anyone ran into this before and found a way to get a mortgage on a second home an easier way.
Yes, I found an easier way, but our situations may not be parallel. I bought (mortgaged) a second home with only proof that I had the downpayment, deposit, and closing costs--all while my house was on the market. It was not an issue because I have good credit, some assets, & no mortgage on the first house (and they are of equal value).
I am guessing that you have a mortgage on the first house. Things I cannot guess are your credit score, income, assets, & equity.
Worst case scenario: If you cannot get qualified through a bank, credit union, or Broker. . .IF you have a great deal of equity in your current home, you MIGHT qualify to take out a HELOC on it--to pay for the second home. THAT is a risky scenario because of the housing market. . . . That probably wouldn't work now, because you've already had a bank run the numbers for a loan.
The banks are trying to protect themselves from people doing "buy and bails". That is, you buy a 2nd house now while your credit is still good, telling the lender you intend to sell the first house. Then, when you have the 2nd house all closed, you stop making the payments on the first house and walk away, letting it foreclose. It is happening often enough that the banks had to chance their rules to try to prevent it. That is what you are running into.
This is especially likely to be the case if your current house is upside down (you owe more than it is worth). That is when this happens most often.
Not saying that is your intention, but it is what you are up against, because it is happening a lot.
It's not that there is little help in getting the market going, it's that they don't want people to keep over-extending themselves, and when you are taking on the expense of two homes and $250,000 in mortgages, yet only have $5k to put down, it seems like they may be right to be cautious.
You're probably also running into problems because the likely mortgage is under $50k, and the house apparently needs repairs.
Yes, I found an easier way, but our situations may not be parallel. I bought (mortgaged) a second home with only proof that I had the downpayment, deposit, and closing costs--all while my house was on the market. It was not an issue because I have good credit, some assets, & no mortgage on the first house (and they are of equal value).
I am guessing that you have a mortgage on the first house. Things I cannot guess are your credit score, income, assets, & equity.
Worst case scenario: If you cannot get qualified through a bank, credit union, or Broker. . .IF you have a great deal of equity in your current home, you MIGHT qualify to take out a HELOC on it--to pay for the second home. THAT is a risky scenario because of the housing market. . . . That probably wouldn't work now, because you've already had a bank run the numbers for a loan.
Yes we have good income, I been with my compaany over 20 years, and good credit, but do have mortgage on first home, it was built in 2008, so not a lot of equity. We can come up with the 20% down, but the problem we're running into is, the lenders think we're going to rent the second home, I tell them that we want to DOWNSIZE DOWNSIZE DOWNSIZE DOWNSIZE to move closer to our jobs, and get the second home first in order to do some repairs, but they don't believe us, and/or thinking we'll buy & bail. One guy told me yesterday at a local mortgage company, that his lenders won't believe me that we want to move from a $235,000 house (trying to sell at $199,900 ) into a $50,000 house, but he said that we if were going into a house that was worth $175,000 that they may go along with that. We can afford both mortgages, but I guess with all the foreclosures, there has been no deal with any of them, and I'm at a brick wall. I guess if we didn't have a pot to pi$$ in , we could get on some goverment program, and they'd be throwing the cash at us...
It seems that the market is at a stand still, and a catch 22, lending won't happen so house will sell, houses won't sell, because lending won't happen.
Just sell your current place and get a short-term rental while working on the new place. It is virtually guaranteed to cost less to do it that way than it does to pay two mortgages at once for an undetermined length of time.
Banks are lending. They are just trying do it more responsibly than before.
Just sell your current place and get a short-term rental while working on the new place. It is virtually guaranteed to cost less to do it that way than it does to pay two mortgages at once for an undetermined length of time.
Banks are lending. They are just trying do it more responsibly than before.
Yes, renting a place after we sell, looks like what we'll be doing and working on the new house. Or we can just get by, by living in the basement of the new house, and eating at McD's or maybe even Outback once in a while....
Thanks for all info,
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, but there seems to be very little help 
to get market going.
Credit, Equity, and a HELOC
Things I cannot guess are your credit score, income, assets, & equity. 
. . . That probably wouldn't work now, because you've already had a bank run the numbers for a loan. 
) into a $50,000 house, but he said that we if were going into a house that was worth $175,000 that they may go along with that. We can afford both mortgages, but I guess with all the foreclosures, there has been no deal with any of them, and I'm at a brick wall. I guess if we didn't have a pot to pi$$ in 
, we could get on some goverment program, and they'd be throwing the cash at us...
