Can you borrow more than the price of the home to cover any and all out of pocket expenses?

Asked by tigerfan, Illinois Fri Oct 28, 2011

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13
Rob Weber, Mortgage Broker Or Lender, Plainfield, IL
Wed Sep 18, 2013
I just noticed this original post was in Naperville, where I live *lol*. USDA financing isn't available anywhere in Naperville or the surrounding towns. Further out by say, Yorkville or further south, maybe one or two towns south of Bolingbrook you might find a population density low enough to qualify for USDA financing (I'd have to pull up the chart and it'll change soon so that'd be wasted energy). When the new chart comes out later this year, everyone will know about it and anyone interested in this can always email me and I'll let you know when the changes are released (the areas that are eligible).
Web Reference:  http://RobWeber.com
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Rob Weber, Mortgage Broker Or Lender, Plainfield, IL
Wed Sep 18, 2013
This is an old question but since no one answered it sufficiently, I'll add to it now. A USDA loan IS one way to do it (of course VA financing) but with a USDA loan, if the home appraises for more than the purchase price, you can roll in some or possibly all of your closing costs into the loan, it just depends on the current ceiling at any given time for USDA (guidelines change over time) and how much over your appraisal came in at.

Of course if you need to do repairs, there's always a 203k loan as others mentioned.
Web Reference:  http://RobWeber.com
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Bob Brandt, Agent, Schaumburg, IL
Mon May 27, 2013
This is an old question....but.....Wells Fargo offers a Conventional renovation loan that has similarities to FHA..
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Thomas Young, Home Buyer, Phoenix, AZ
Sun May 26, 2013
203k loan is designed for home repairs.
From my experience with 203k loans, the best advice is to use a lender that offers assistance via third party with 203k processing.
This shortens the closing time by weeks. Try http://www.cfs-mortgage.com/203k for more information.
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Kenneth Brit…, Agent, Columbus, OH
Wed Nov 2, 2011
203k rehab loan will provide additional money for repairs on the home. Consult with the lender regarding, the home repairs exceed the 203k streamline minimum and you need the traditional 203k for major structural repairs. FHA will allow a gift for out of pocket expense, down payment or closing cost. There must be a paper trail for the gift and it must come from a family member or fiance. Every credit report would greatly benefit from having credit monitoring, especially when starting down the journey of the home buying process!! Also educate yourself about the 5(FIVE) area's of identity theft and be proactive in improving your credit report daily!Don't hesitate another day without being protected and being unfamiliar with the Fair Credit Reporting Act of 1971.
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Dp2, , Virginia
Sat Oct 29, 2011
Yes, it's possible, and we investors do it all of the time. Another key to doing this correctly--besides what Anthony and the others mentioned--is buying the property at enough of a discount to cover those costs. Stated another way, a property will never appraise for more than its ARV, so you'll have to reduce the ARV by at least the amount of those costs, and then offer that figure.
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Anthony Cava…, Agent, Jolier, IL
Fri Oct 28, 2011
You can get more money than the purchase price if the home needs significant repairs and you get an FHA 203(k) loan. Your lender won't just give you the money and you will need estimates before you purchase. The property will also need to appraise out for the total loan value.
Web Reference:  http://tonysellschicago.com
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allan erps,A…, Agent, Pearl River, NY
Fri Oct 28, 2011
In this area we call that a Sellers Concession(adding anywhere between 3-6% over the cost of the home to include closing costs. Mortgage Broker is your best bet for sure and understand what you borrow must appraise or you will be responsible for the difference. Regards Allan
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Sally Grenier, Agent, Boulder, CO
Fri Oct 28, 2011
You can't get a loan for more than the house is worth. But as other agents have said there are a few options for zero down payment (VA & USDA). Are you a vet (and can qualify for a VA loan)? Or would you want to buy in a very rural location (for USDA). Some states have down payment assistance programs -- but it's typically in the form of a 2nd loan. FHA will let you put only 3.5% down. Talk to a lender and find out what the best loan option for you would be. For "out of pocket" expenses such as closing costs -- you can often negotiate with sellers to pay for all or part of those.

But let me ask you this....why would you want to have zero equity in a home right off the bat? Do you have money to put down, but just don't want to? If you don't have money for up front expenses, then what happens when the furnace goes out, or the water heater breaks?

This is why we're in the housing mess we're in. People bought homes who couldn't afford to,. They put zero money into it, therefore had nothing to lose when things went south. So they walked away.

I suggest you buy what you can afford.Again, only a lender can help you with that. Good luck!
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Marianne Hof…, Agent, Naperville, IL
Fri Oct 28, 2011
Hello Tigerfan,

Yes, you should definitely talk with a mortgage broker as opposed to a mortgage banker. Mortgage brokers have accessibility to more loans. You might want to give Charles Zofkie a call. He is excellent and can be reached until 10 pm in the evening. His number is 630-456-0870. Email: charles.zofkie@guaranteedrate.com. Please tell him Marianne gave you his name.

I would love to help you find a home you love.

Giving YOU The Best Real Estate Experience Possible,

Marianne Hofmann
Broker, e-PRO (Internet Certified)
630-664-9472
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Michele Nixon, Agent, Naperville, IL
Fri Oct 28, 2011
Hi there,

Both agents are correct. A loan officer can best tell you what programs you would qualify for that would help with some or all out of pocket expenses. And, depending on where you're looking, there are some county programs for first time home buyers as well.

Your best, first step is talking with a lender. If you need help finding a home after that, don't hesitate to contact me. I'd be happy to help.

Best,
Michele Nixon
Web Reference:  http://www.michelenixon.com
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Abu Musa, Agent, New York, NY
Fri Oct 28, 2011
You may talk to a mortgage banker.There are different kind of mortgage available, so find the one is suitable for you.Good luck.
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Scott Godzyk, Agent, Manchester, NH
Fri Oct 28, 2011
There are different types of loans, VA and USDA are no money down and the seller can pay most if not all of the closing costs. There is th fha 203k which you can get money towards repairs. Your best bet is to meet with a local and trusted mortgage broker, they can prequailify you at no cost, they will look at your credit plus your financials and let you know if there are any programs that you may quailify for to accomplish your goals.

http://www.trulia.com/blog/scott_godzyk/2011/08/how_do_i_kno…


PLEASE SEE MY BLOG FOR A FULL LIST OF TIPS AND ADVICE ON GETTING A MORTGAGE
Web Reference:  http://www.ScottSellNh.com
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