Home Buying in Akron>Question Details

Gman, Other/Just Looking in Akron, OH

Financing Options: 203k? I need help!

Asked by Gman, Akron, OH Mon Sep 27, 2010

I have a home that I bought (have a mortgage) 2 yrs ago. My finances are secure, good credit, etc. I have some money in the bank and had been toying with getting into rental property. I've found a house that is very reasonable and though it needs "some love" it really doesn't (surprisingly) need too much. The house is around $20k and I estimate that it requires about $5-10k put into it to take care of some rehab things.

I was thinking a mortgage for this price wouldn't cost me much at all per month and I could easily handle it (incl. down payment, closing, etc) but now I'm learning banks won't lend for this small amount. I've heard that a 203k loan would work but also heard that I'd have to be the occupant there, which isn't going to happen.

Did I hear wrong? What are my options, if any? I've tried 3 different recommended mortgage brokers today and no one will return my call.

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Answers

5
Ms. Mont’s answer
Hi, as a previous Loan Officer and a current Realtor, I know it is very hard getting a loan. I suggest that you try PNC bank, they do 203K loans and Wells Fargo, they also do 203K loans. While you are looking for the right lender, DO NOT let each lender pull your credit. Ask a lot of questions first, like: what credit score is required? what is the minimun loan amount? How long will it take to close? What is the down payment for investors? What are the approximate monthly payments?
If you need more assistance, let me know. Good luck
Beverly
0 votes Thank Flag Link Thu Oct 14, 2010
i agree with the other comments. If you have equity in your home use that or try a small local credit union or bank. You may be able to get a loan from them--likely not a traditional mortgage.
0 votes Thank Flag Link Tue Sep 28, 2010
Typically, lenders don't want to lend for loans under $50,000. And, since the property is $20,000 and it only needs $5k - 10k in repairs, the loan would only be for $30,000 tops, even with the 203K. The thing that bugs me about some loan officers is they won't return clients' phone calls. If they can't help you, at least have the respect to tell you so.

Perhaps, a loan officer here on trulia can better assist you. And point you in the right direction.
Web Reference: http://www.DesariJabbar.com
0 votes Thank Flag Link Mon Sep 27, 2010
If this new property is not owner occupied lenders are looking anywhere from 20-30% down payment a 203K is a loan that you would have the money to do repairs, but you would probably be better off taking equity line on your existing property to pay for the repairs, you have want to discuss with a lender.

Barbara Kachenko
RE/MAX Haven
0 votes Thank Flag Link Mon Sep 27, 2010
Financing a home purchase can be a challenge in this market in this price point. One option you might consider is to take out cash from your principal residence in the form of a home equity line of credit. Essentially you'll be able to purchase the investment property for cash and you'll have the funds available for repairs. If you take a loan out you're probably looking at a minimum 20% down payment. Hope this helps.
0 votes Thank Flag Link Mon Sep 27, 2010
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