HAWK, Home Buyer in 84404

We are looking at buying a house that is 75k we want to take out a loan for 100k & use the extra 25k to make a few updates and buy some

Asked by HAWK, 84404 Mon Dec 19, 2011

appliances. such as a fence for the dogs, carpet, fresh paint through the house, remodel/update a bathroom, fix the deck, buy a fridge, and a washer & dryer. & were hoping to pay off both our school loans and maybe even the car and have everything rolled into one loan and one payment. Is that allowed/ possible?

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Deborah Garv…, Mortgage Broker Or Lender, San Diego, CA
Mon Dec 19, 2011
A 203K will allow you to purchase the property and do most of the renovations you are planning to the property. Yes, it will even allow you to buy the appliances (though the wisdom of financing a appliance over 30 years may be disputed, it CAN be done). The fence for the dogs may or may not be possible. Repairing/installing a fence MAY work...a dog run would not be acceptable.

The product will not allow you to roll any outside debt into the mortgage...with no exceptions. Again, rolling a car payment into a 30 year loan would make little, or no sense. Typically a 30 year mortgage (with interest) will about triple the debt....so a 30K car would cost about 90K over 30 years...and we all know the car is not going to last 30 years.

Words of Wisdom: Do not think of your home as a piggy bank to finance all of the other desires and fancy's of life. That is the primary reason a good number of people are so underwater on their homes after the current market corrections. Yes, some people bought a higher housing prices and have suffered the result. However, I have seen many, many people throughout the past 25 years who did refinance after refinance to pay off credit cards, take vacations and buy cars. Imagine buying a house for 30K 25 years ago and now owing 650K on it! Yes, I have seen that loan....and that consumer blames the bank for the fact they are underwater. Sheer nonsense. Buy your home and pay it off as soon as you can...that is the only financially savvy way to home ownership. Best to you!
1 vote
Annette Law…, Agent, Palm Harbor, FL
Mon Dec 19, 2011
Hawk, if I understand your plan you want to finance carpet, fresh paint, fencing, appliances, school loans and a car into a 30 year mortgage! Of the items on the list, how many will be appraised to have any value after 5 years?

You should look into the FHA 203 loan program. It is designed for just this purpose with some constraints. But you absolutely do not want everything rolled into a 30 year mortgage.
1 vote
Ron Thomas, Agent, Fresno, CA
Mon Dec 19, 2011
Please listen to what Deborah says and believe her:
You can use her for the loan by the way; it would be nice to have someone you can trust to tell you the truth even though it hurts.
You can give her a BEST ANSWER too.

Good luck and may God bless
0 votes
Terry McCarl…, Agent, Cape Coral, FL
Mon Dec 19, 2011
Annette gave you good advice! You do NOT want to roll car payments and student loans into a 30 year mortgage. The FHA 203 loan program could work for you regarding things that directly effect the home. Speak with a lender that is familiar with the FHA 203 loan to get solid answers on what you can and can not do.
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