Financing in 75482>Question Details

redearth, Home Buyer in 75482

getting a mortgage with a high downpayment (75%) with bad credit

Asked by redearth, 75482 Sat Feb 19, 2011

Is it impossible to get a mortgage loan with about 75% down and bad credit under 600? I found a wonderful foreclosed home and if they don't except my cash offer and want a higher amount I would have to seek out a loan for the rest. The home is worth about 75,000 and the REO has it listed for 58,500 it has been on the market and vacant for a long time. This property sits in a rural area and needs cosmetic repairs. I have about 40,000 in cash to use. Of course I want to offer the lowest I can but I might need to finance the rest if I have to pay above this amount. What are my options am I out of luck?

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If this were in a major metro area I could easily fund this with Private Money. If its going to be owner occupied you would still have to show proof of income and ability to make the payment. The challenge here is the fact that its rural in and outlying area and not many private investors will risk there money there. If it's for investment purposes your options may open up a bit but not much, again for location reason. Any lender who would fund it that way would want to make the loan large enough to include some funds for repairs then held in escrow. Reason being that no lender would want to be in a loan @ $40k if it needs another 10k in repairs. Your better off making a loan of $52,000 or 65% of After Repair Value, then releasing the repair money in draws to make sure the work is done. Hope this helps some. I would try some hard money lenders in the Dallas area.
Marco
210.286.8136
0 votes Thank Flag Link Tue Feb 22, 2011
Thanks for the great answers. What if I found a house that was priced around 80 thousand and did 50% down. Would my bad credit stop me in my tracks as well?
0 votes Thank Flag Link Sun Feb 20, 2011
yeah your best bet might be a hard money loan. I know lenders dont lend this low. Min i see is 75K.
0 votes Thank Flag Link Sun Feb 20, 2011
You will want to look into small local banks or a deal like this.
Traditional mortgage channels probably will not lend that low loan amount.

Tom Burris
Mortgage Banker
DallasLoanGuy.com
(214) 763-4629 cell/text/nights/weekends
tomburris@dallasloanguy.com
Lending all across the Great State of Texas!!
0 votes Thank Flag Link Sun Feb 20, 2011
The chances are not great as the option you proposed is also not something most lenders would consider as the amount you would finance would be at a level most no longer accommodate. Combined with your credit score and the condition of the property yet to be known, this proposition seems a lot less likely.
Out of luck?
Never? You may not be in such a bad credit situation as you may think. Your first step is to actually go ahead and contact a mortgage broker (not a bank - unless you are part of a credit union where you may have some options available). You'll be receiving a few contacts from brokers through this sire, so you've taken the first important step.
It's time to get creative and think outside the box. Your cash on hand provides you extremely VALUABLE LEVERAGE, but now the goal is to find the way to use it.
I may have a few options available for you to explore. Please feel free to contact me and I'll put you in touch with who I can to determine if there's an immediate solution or at the very least, a solution on the horizon.
Rob@RKRegan.com
Rob Regan
R. K. Regan Team
Web Reference: http://www.RKRegan.com
0 votes Thank Flag Link Sat Feb 19, 2011
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