Home Buying in Lake Elsinore>Question Details

Adibaby, Home Buyer in Lake Elsinore, CA

Hi I'm interested in purchasing a house that has fire damage. I qualify for about 150,000, and the asking price of the property is $110,000.

Asked by Adibaby, Lake Elsinore, CA Thu Oct 15, 2009

I'm trying to see if I can lower it, however the loan office who is helping me said I won't be able to buy it because is not livable. My husban is a general constructor and the property is so worth it for that money. Another thing is my husband is going through a loan modification (bought the house before marriage). Is it true that no bank will lend me a loan for that particular house?

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11
Talk with your lender or another about a rehab loan. I am doubtful that a home with fire damage is going to get a standard loan.
0 votes Thank Flag Link Tue Mar 17, 2015
It sounds like something you will want to negotiate with the home owner. There will definitely need to be some repairs done on the home. Perhaps you should look into how much that would cost and then take that information back to the seller. http://www.totalrestorationgc.com/firedamage
0 votes Thank Flag Link Tue Mar 17, 2015
Hello Adibaby,

As far as purchasing and getting financing for something like that with fire damage,
There are definitely a few different options for you. the fist question is; are you planning to live in the house? the answer to that can make a difference.

Please feel free to contact me so we can go over the different options you may have.
No Worries - There's no obligation to do anything, buy anything or even work with me.

simply email me and we'll get answers to you. Thanks

email me at either; info@MyHomeNowInc.com or MyHomeNow@HotMail.com
0 votes Thank Flag Link Thu Apr 17, 2014
If you like I can send you a list of lenders who specialize in what you want. It as a Free service.

feel free to contact me at myhomenow@hotmail.com
0 votes Thank Flag Link Sat Jan 18, 2014
Dear Trulia editors, please deactivate questions like this. Well-meaning people take the time to read the question and answer, but the original poster has long since moved on. Just about four years now!
0 votes Thank Flag Link Tue Sep 3, 2013
Mack, I do understand your concern. But, truly, many of us have the same questions as the original poster so we all benefit from the question and the responses many years later. I came for an answer to my own need so I almost feel like these responses are here just for me.
Flag Sat Jan 25, 2014
Hello Adibaby,
It's not easy but there are lenders offering rehab loans that will do it depending on the extent of the damages & the cost to repair vs. the value, as well as your personal factors.
An additional problem will be to convince the seller that they would be better off taking your offer over a cash buyer- especially if it is bank owned.
Good luck,
Trevolyn
0 votes Thank Flag Link Thu May 13, 2010
I'm pretty sure that banks and mortgage companies will not finance unlivable property. The rule of thumb for them is to let u find a property that costs less than it is actually worth so in the event of default they make out like the bandits they actually are.
Most fire damage/ handy man specials sell for cash, and then they cost only about 3/4's of what they were worth when they were in good shape.
I just suffered a fire on May 5th and I'm walking away. The home was worth about 95,000.- 120,000. prior to the damage. It is relatively small but sits about two house lengths from a lake. Great view but I've just had it with Jersey in general and am planning on leaving the state. I know a few contractors who I will contact when I'm ready and I believe my home will easily sell for $65,000. - $85,000. cash simply because of the location. A good contractor will only have to invest about $10,000. to gut it and make it new again.
It would be best if you could either find the funding through some other means or if the owner would take payments. Sometimes if u can put at least half down, they will accept monthly payments. That's the plan I have if an interested party cannot find full funding or falls short in the cash department.
Good luck to u.
0 votes Thank Flag Link Thu May 13, 2010
The bigger question is this: How easy will it be for you to sell a home on the open market once you've disclosed that the home has been involved in a fire?

Not too many people I know are out looking for homes with that kind of damage (skillfully repaired or not). There's a good reason that some real estate is a great deal and in this case its most likely because the home has been torched.

Three rules to real estate: Location, location, location ... NOT Fire, mold, water

Keep searching, there are better deals in your area I bet!
0 votes Thank Flag Link Wed Jan 13, 2010
The reason it is not easy to get a loan on a property that has fire damage is due to the fact that it is risky for the lender. Banks don't want to get a property like that back, if the borrower defaults.


Properties like this usually sell for cash....Maybe you know someone who can purchase the property and have your husband fix it. After it is fixed, you can sell the house and both make a profit.
Web Reference: http://www.soreal.biz
0 votes Thank Flag Link Wed Jan 13, 2010
I agree with Robert on all fronts. If by chance this is a potential investment for you, then there is also money available, up to 65% of the market value, once the home is fixed up. This is one year financing and is intended to help investors who do not have their own funds, to still be able to invest in the Real Estate market.
0 votes Thank Flag Link Thu Oct 15, 2009
If you are unsure if the information that you are getting from your loan office is correct, you have the right to get a second opinion. You can seek the consult from any reputable loan professional.

With that said, I'm not sure I have enough information to offer much insight on the subject. A lot has to do with the type of loan your seeking and if you qualify without your husband on the loan. Seems strange that in one household you have one spouse trying to finance the purchase of one home while the other is doing a loan modification on another home. But without all the facts, I can't say one way or another if that precludes you from what you are trying to do.

If the house has structural issues, it will be very difficult to get a loan. If the structure is fine, but the damage can be corrected to living standard with certain light construction, and if you qualify for an FHA insured loan, you may want to look into an FHA 203(K) construction loan. It's designed to allow you to purchase a property that is not up to FHA standards by getting a loan that pays for the repairs and then gets wrapped into the final purchase money loan. Of course, the property will need to be purchased far enough below market value to have room for the loan.

Talk to your loan officer about that and see what he/she has to say, since he/she should have all the details about your situation, he/she can explain how it may (or may not) apply for you.

Good luck.
0 votes Thank Flag Link Thu Oct 15, 2009
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