How to obtain mortgage?

Real Estate Investing Real Estate Financing
1

Can complete work on rehab within 30 days; purchased for cash. Appraised value is 100% above purchase price. FHA mortgage is out of the question,
due to the short period of time of ownership and increase in value. I wish to
sell this property as quickly as possible and wish to market it; I’m concerned
about a lenders “underwriting department” questioning the price increase.
Any and all suggestions are welcome.

2

I don’t think FHA is out of the question. I would call your local lenders and find out what their criteria is for both FHA and Conventional. You want a local lender with local underwriters. Be prepared to show that your purchase price was well below market value, and be able to show your repair receipts.

–Natalie

3

How to obtain mortgage?

Mortgage lenders are much more welcoming to applicants who have no other debts as they are regarded as lower-risk borrowers. Not only will clearing your debts give you a better chance of a green light from a mortgage lender, you will have a greater capacity to borrow.

4

FHA rules currently allow you as little as 90 days to flip the house. 30 to rehab, a little marketing time and then time to get to settlement will put you there easily. What we have even done in the past would put a settlement date on the contract that was on the 91st day we owned the property.

Conventional mortgages with 5% down are back as well and that will also get around this requirement without much more down on the buyers part. You can make the financing contingency dependent on that type of mortgage, then if FHA has an issue the buyer is contractually obligated to get a conventional mortgage, or lose their earnest money deposit

5

FHA does not currently have any rule preventing flipping in less than 90 days. That rule was suspended several years ago and currently is suspended through the end of 2014.

Lenders are the ones who are applying the 90 day restriction, so you must find a lender that will allow it.

Again, FHA is not preventing you from flipping to a FHA borrower when you own the house for less than 90 days.

–Natalie