Financing a house question
By
on
August 9th, 2008
I am purchasing a home for $85,000 I was approved for a loan for 125,000. This is my first home.my question is can I get the loan for 100,000 so I can do some much needed remodeling on my kitchen. Or do I have to re apply for another loan.
the house was appraised at 103,000. but my friends are selling it to me for 85,000. They paid it off several years ago.
Cat says:
You’d have to reapply for another loan. Banks will NOT want to lend more money than the house is worth.
If they have to foreclose, they want to be able to sell the house, and recoup the money. If they lend more than it’s worth, that won’t be possible, and they could suffer a loss.
August 9th, 2008 at 1:43 pm
MM C says:
Your appraised value now is $103K because the recently sold houses in that area is around $103K. After you close the loan, the value of the house in the neighborhood will be below $103K because your sale price pull down the value.
That’s the reason why the bank only lend the amount up to the purchase price and not the appraised value. You can say you got a very good deal already cos’ other sellers in the area might not want to sell at this price will need to wait longer to find a buyer because of your deal.
Try to negotiate with your friend to remodel the house first and add the cost of it to the sale price so you can get a loan that include the remodeling and will be ready for you to move in.
August 9th, 2008 at 2:19 pm
frak1a12345 says:
Since your approval was so much greater than what you are actually buying you will easily be able to pay all your bills and have some money left over. I recommend saving that excess income and doing your improvements as the cash becomes available. It will be a slower process but it will keep you out of trouble financially. For instance, do you have a 6 month cushion of cash to cover any emergencies that might arise.
You don’t have to be in a big hurry to fix up your new home just as you want it to be. I can guarantee you from my many years of home ownership that any shortcomings will still be there tomorrow and next week and next month and even next year. Address them as you have the money and you will do just fine. Good luck.
August 9th, 2008 at 3:17 pm
yeochief2002 says:
Take the smallest loan you can to get into the house. Live there for at least one year without doing anything other than routine maintenance and paying the bills that go with owning a home, don’t forget taxes and insurance.
At the end of a year, you will have a better idea of the costs of owning a home, and will know how much you can afford to put into a remodel. After a year with your old kitchen, you might have different ideas about what constitutes a good remodel.
Trying to move into a dream home right off the bat generally leads to unexpected expenses and can give you much grief.
You are very fortunate that you can get into a house that you seem to be able to afford. Don’t push its cost up to the level you cannot afford right out of the box.
August 9th, 2008 at 4:07 pm
Yareli says:
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August 9th, 2008 at 4:42 pm
Luke L says:
You can get a loan called the FHA 203k streamline loan where it allows you buy a house and get upto 35k for improvement, but be aware that there are certain criteria involved. Find a local lender who is well versed in this progrsm, if you ask about the 203k streamline and they look like a deer in headlights, run far away. Find an FHA approved lender first and then shop until you find the one you feel knows what they are doing. As a lender in Iowa, we do FHA all the time. Good luck and I hope things go well.
August 9th, 2008 at 5:40 pm
Nikki says:
Tell your friend to sell it to you for $100,000 and give you the $15,000 in closing costs for repairs. Then your loan will be $100,000.
August 9th, 2008 at 6:28 pm
PATRICK S says:
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August 9th, 2008 at 7:14 pm
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August 9th, 2008 at 8:01 pm