Posted by James Strange on August 07, 2003 at 19:10:21:
Yes I have a lender that does these kind of deals. The best part is the know that time is a big factor so the move fast.
James Strange
HUGE equity project but bad credit-Help ASAP!! - Posted by Jerry
Posted by Jerry on August 07, 2003 at 14:13:39:
My wife and I own a residential development with a total of 6 lots(large acreage lots). We have two purchase agreements on two of the lots pending closing, one for $75,000 and one for $50,000 (once closed will pay off mortgage). We owe the bank $126,000 on the whole development and it is appraised at approx. $450,000. We want to finance a deal to borrow $235,000 to build a house on one of the lots for a primary residence. Once the house is completed that will raise the value to approx. $630,000. Problem is we have pretty bad credit. We have approached our current bank with the deal but this is something they will not do. We want to move fast on this so we can still build before winter. Any help greatly appreciated.
Re: HUGE equity project but bad credit-Help ASAP!! - Posted by James Strange
Posted by James Strange on August 07, 2003 at 18:38:51:
This due to the LTV this is possible as long as you have a good plan in place.
How long do you think it will take to build the house?
But here is another question. Why not build one house and sell it then build your primary residence?
James Strange
reiloans@earthlink.net
Re: HUGE equity project but bad credit-Help ASAP!! - Posted by Cosette Austin
Posted by Cosette Austin on August 07, 2003 at 18:20:38:
I’m a bit confused, so you said you currently own the land or do you have a purchase contract on it?
There are a few companies that will do this loan for you if you own it or are about to purchase it, you can get a construction loan to build the home at prime rates, interest only with two banks… The first is Indymac Bank they will do a 95% loan you need to have a minimum FICO score of 620 and you can borrow up to a conventional amount for land acquisition and consrtuction costs. If you need above that amount
like 400k plus they will only lend up to 90%. You can call your local loan officers in your neighborhood (not your bank, brokers) and ask if they are brokered with Indymac Bank.
Hope this helps… Cosette
Re: HUGE equity project but bad credit-Help ASAP!! - Posted by Jerry
Posted by Jerry on August 07, 2003 at 19:05:29:
James,
Our proposal to our bank was this. They give us a credit line ($361,000) enough to pay off the mortgage ($125,000) and the remaining $235,000 to build our house. As we sell lots in our development (two have been sold but not closed) 80% of the money we make on the sales goes towards what we owe to the bank and 20% goes into an escrow account to cover the loan payments as we build the house. We would like the construction loan set up for 12 months, that way, as we are building our house we can continue selling the remaining three lots in the development with the intention of having them all sold in that 12-month period of time. If all goes according to plan, after the house is completed and the remaining lots are sold, we will owe a maximum of $75,000 on our house and lot that will be valued at approx. $367,000. This is what we proposed to our bank that gave us the original mortgage on the property 14 months ago. We have a very good credit history with them in the past 14 months with no lates but they are a very small town bank and do not do creative financing like this. We approached another bank with the idea but our past credit history was not good enough to finance this deal. Is this something that you can work with or know somebody that does?
Re: HUGE equity project but bad credit-Help ASAP!! - Posted by Jerry
Posted by Jerry on August 07, 2003 at 18:39:23:
We own the land (owe 126k). The land is a residential development subdivided into six lots and two of the lots have been sold (signed purchase agreements pending closing.)