Posted by Tim on March 03, 2001 at 01:00:35:
Actually, we have a home improvement loan. That’s where the initial 10k downpayment is coming from. The loan is for 10 years so if we take out 10k (for the downpayment) it would cost us 70$ a month. If we put it through the mortgage, the duration would be stretched out to 30 years and, therefore, our payment would be less. Plus, it leaves the money in the home improvement loan intact for future deals.
Getting money from lenders for repairs - Posted by Tim
Posted by Tim on March 02, 2001 at 19:34:10:
I have a 3-family unit that is very old but in very good shape. The sellers want 100K for it. I’ve estimated that we would need about $1500 to clean up the second floor at minumum. The first and third are OK as is. Here’s my idea:
Offer the sellers 110K with the stipulation that they give us back 10K at closing for repairs. (This would give the sellers their asking price.) I think we could easily stretch the repairs to 6 or 7K and up to 10k with some creativity if someone asked us what it was going to be used for. (I have all intentions of telling the lender what the extra 10k is for upfront). We would be putting down 10% so our mortgage would be on 100K. As I’ve stated before, this gives the seller there asking price and we would have 10K to use towards clean up of the property (1500) and to replace a large portion of our downpayment (remaining 8500). I have read of people doing this on this board but I don’t know if they’ve done 10% for repairs. I think I’ve read about it only being done with 4 or 5%. Is my idea legal as long as your upfront with the lender? I can’t imagine the sellers would baulk at it because all they care about is getting their asking price, which they are. Any thoughts or suggestions on this would be greatly appreciated. Thanks.
Re: Getting money from lenders for repairs - Posted by TCK
Posted by TCK on March 02, 2001 at 23:53:01:
Tim,
If you’re going to disclose it to the lender, then it’s not lenders fraud, so you should be ok. What I don’t understand is why don’t you just go get a home improvement loan? You can then pay it down faster then you would if it was part of your first.
TCK