Home Buying in 06776>Question Details

Mike, Other/Just Looking in New Milford, CT

Can I mortgage more than the asking price for a property?

Asked by Mike, New Milford, CT Thu Jan 31, 2013

I am purchasing my first home and would like to get cash back at the closing to put into some needed maintenance on the property. Someone told me it is illegal in Connecticut.

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5
GOODLUCK WITH 203K LOANS.. I DID ALL MY HOMEWORK HAD CONTRACTORS IN HERE KNEW WHAT THEY WERE DOING ARE FEW AND FAR BETWEEN BTW THAT WILL TAKE THE 203K LOANS BECAUSE OF THE WAY THEY ARE PAID, AND IT IS A BIG HEADACHE. WITH HOUSES THE PRICE THEY ARE NOW, BUY ONE WITHOUT A HEADACHE. WISH WE HAD. I NOW WANT TO TOTALLY REDO MY HOUSE SELL IT AND BUY TOTALLY NEW. LIKE THAT WILL HAPPEN IN MY LIFETIME RIGHT?
0 votes Thank Flag Link Sat Jan 4, 2014
See if you can get a 203K loan.
0 votes Thank Flag Link Sun Feb 3, 2013
Hi Mike, Chad is somewhat correct. The law allows you only to get a seller concession to cover closing costs. If you go over the amount the closing costs are this money would stay with the seller. For example you agree to buy the house for $185,000 and you add $10,000 that you hope to use for improvements which means you are actually buying the house for $195,000. If your closing costs are only $7,000 the seller gets the additional $3,000 meaning that you actually paid $188,000 for the house instead of the $185,000 that you thought. You should discuss with your mortgage broker and attorney to get a better idea what the closing costs would be so that you can add these to sales price for a refund at closing if this is what you choose to do.
Good Luck!
Ray
0 votes Thank Flag Link Sat Feb 2, 2013
Question: How does this effect the Mortgage Appraisal for the property?
Flag Sat Jul 13, 2013
Thank you again Ray.
Flag Mon Feb 4, 2013
Hi Mike, You can get seller concessions from you seller. Basically you raise the price by the amount you need to do the repairs and put in the contract that the seller is to pay you that money at closing. I have done it in a couple of transactions. For example: You negotiate a price of $180,000 for the house. The roof needs repairs of $10,000 and the kitchen needs a $5000.00 update. So you write the contract sale price as $195,000 and the seller gives you a check back at closing for $15,000. Your attorney will advise you of the procedure, but it is quite simple.
0 votes Thank Flag Link Fri Feb 1, 2013
Thanks Chad, I appreciate the info.
Flag Sat Feb 2, 2013
You can do a FHA 203K Loan which allows you to borrow extra money to do renovations or improvements to a home. There are guidelines you need to follow. Some local banks may offer something similar with their conventional loans. Best to talk with a well versed Mortgage Broker in these types of loans.
Hope this helps and good luck with your new home!
0 votes Thank Flag Link Thu Jan 31, 2013
Thank you Ray.
Flag Fri Feb 1, 2013
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