Financing in Houston>Question Details

Trulia Houst…, Other/Just Looking in Houston, TX

Can you get a mortgage worth more than 100% of the property's value, so as to fund renovations or pay off debt?

Asked by Trulia Houston, Houston, TX Mon May 6, 2013

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You ask about a mortgage of more than 100%. There are few programs that will even lend 100% and those programs are not for everyone or every property.

FHA has a loan program that will allow you to purchase a property and the repair/renovate it. You will still need a down payment and there will be closing costs.

There are no purchase loans that will provide an amount over the purchase price of the property in order to consolidate debt, go on a vacation, buy a car, pay for a wedding, buy lottery tickets, etc.
0 votes Thank Flag Link Mon May 6, 2013
Certain renovations may permit more than the value as long as an appraiser can estimate the value after the renovations...

Have a great day;

Christina Solorzano;
CEO & SR Credit & Mortgage Consultant of
Everlasting Credit
Ex-Mortgage Broker of more than 10 years
0 votes Thank Flag Link Mon May 6, 2013
Oops meant to say certain renovation loans.... Sorry
Flag Mon May 6, 2013
Are you talking about a purchase loan to fund these things?
A refinance to fund these things?
0 votes Thank Flag Link Mon May 6, 2013
You can. FHA offers a construction loan or you can go hard money which is a short term loan for rehabs or individuals that want to rehab and then refinance into a 30 year loan.
0 votes Thank Flag Link Mon May 6, 2013
Generally speaking, no. There are FHA-insured rehab loans, but they're not to update or renovate the property. Practices such as that are partly responsible for the collapse a few years back. These days, appraisals aren't the slam-dunk they were. As for outstanding debt, lenders are more stringent than ever ... forget about borrowing from Peter to pay Paul.

Al Geffon
(713) 213-6350
Web Reference:
0 votes Thank Flag Link Mon May 6, 2013
I know of some lenders that will mortgage a bit more than the sales price for things like renovations or a pool, but the appraisal process can be tricky. This is a very recent development. Prior to 2008, it was very common. After 2008 no one would do anything outside the box. Now we are seeing a little of it, but from non-conforming lenders with in-house investors and a slightly higher interest rate.

Paying off other debt, have not heard of that.

Mark McNitt
m 832-567-4357
Bernstein Realty, Inc.
0 votes Thank Flag Link Mon May 6, 2013
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