Home Buying in Lawton>Question Details

Momof2boys, Home Buyer in Lawton, OK

So if someone found a foreclosed home for 20,000 and then they wanted 10 to 15,000 more to remodel could they get a loan with that so low of money ?

Asked by Momof2boys, Lawton, OK Fri Jul 15, 2011

Ok i was wondering if someone found a foreclosed home and wanted to buy it for 20,000 then needed to borrow money for repairs witch is another 15,000 . Could they get a 35,000 home loan or Would it be better off to find a home for like 50,000 since they don't have cash and cant get a loan at at bank . And there credit score is 600.

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A loan at a local bank would be your best bet. Local banks like Bancfirst and Liberty National here in Lawton will actually lend up to 80% of the purchase price and any repairs that you wanted to do. So lets say you list $20,000 in home repairs also, even though the home only costs $20,000 they would lend you 80% of the total amount, so 80% of $40,000 or $32,000. That would pay for the home and most of the repairs you wanted to do.
3 votes Thank Flag Link Sun Sep 11, 2011
The problem, as you note, is that the amount you'd be looking for is so little--under $50,000.

A 203(k) loan would be the way to go to buy a home and include within the loan the money to do the repairs. But someone familiar with mortgages will have to address the low amount to be borrowed.

And while it probably would be easier going above $50,000, don't spend more just because it'll make that part of the process easier. If you can get the property for $20,000, why spend nearly double that ($35,000, assuming the more expensive home still needs repairs)?

There are a couple of other ways to buy such a low-priced property. If it weren't a foreclosure (if you can find someone just willing to sell to you directly), you can look for owner financing. Another option: Find an investor to buy the property, then sell it to you on terms. The investor will make some money--so it'll be more expensive than if you'd bought it directly--but you will be able to get financing. And it can be structured so that your payments are still reasonaable.

Yet another option would be to get a personal loan. The interest rate would be higher, but that could cover part of the expenses. Or get a co-signer for the personal loan.

Hope that helps.
0 votes Thank Flag Link Fri Jul 15, 2011
Don Tepper, Real Estate Pro in Fairfax, VA
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