Need some real estate advice

[300Busa]

I have the opportunity to buy my mother's house for dirt cheap. Her house is worth 135K and is being forclosed on. She owes 99K on it and her bank wants 10K down on the day of the sale. She has the opportunity to sell it out right before then (nov. 17). She will sell it to me for 100K (just to keep it in the family and not give it to some stranger). I don't have 10K to put down at the moment. How could I go about this? ??? This would be my first home also.

 

[CTA_Busa_LE]

Well I was going to suggest a program called Ameridream but when I went to see if it was still even a possibility I found some bad news. Link: AmeriDream, Inc. - Down Payment Assistance For Home Buyers - Home

Seems that congress has put an end to it as of 10/01/2008

This was an excellent program, one that I used when I bought my first home. The way it worked was the owner of the home would deduct "X" amount of dollars off the home to be put towards the downpayment. The buyer used this as the downpayment and the seller got a big tax credit for it. Would have been perfect for your situation. If the house was worth 135K and your mother owed 100k, she could have priced it at 110k, donated 10K to ameridream which would have been used for your downpayment resulting in you borrowing 100k from the bank. Would have solved the problem, got you in a home, and gave your mother a big tax break on the sale.

Leave it to Congress to screw up a good program! And one that didn't cost the
Government anything to keep going.

 

[300Busa]

Could I get a personal loan for 10k, buy the house for 110K and then my mother give me the 10k back to pay off the personal loan?

 

[Bird Hunter]

Well I was going to suggest a program called Ameridream but when I went to see if it was still even a possibility I found some bad news. Link: AmeriDream, Inc. - Down Payment Assistance For Home Buyers - Home

Seems that congress has put an end to it as of 10/01/2008

This was an excellent program, one that I used when I bought my first home. The way it worked was the owner of the home would deduct "X" amount of dollars off the home to be put towards the downpayment. The buyer used this as the downpayment and the seller got a big tax credit for it. Would have been perfect for your situation. If the house was worth 135K and your mother owed 100k, she could have priced it at 110k, donated 10K to ameridream which would have been used for your downpayment resulting in you borrowing 100k from the bank. Would have solved the problem, got you in a home, and gave your mother a big tax break on the sale.

Leave it to Congress to screw up a good program! And one that didn't cost the
Government anything to keep going.

That was the whole problem, it wasn't costing the taxpayer anything and benefited all involved ... If it doesn't hurt us, Congress doesn't like it !!!

 

[CTA_Busa_LE]

Could I get a personal loan for 10k, buy the house for 110K and then my mother give me the 10k back to pay off the personal loan?

When you write it up on paper it will look the same. Why even get the loan? The loan will show up on your credit record then and may raise questions with the bank you deal with.

If the house were to appraise at 135k, the bank should loan 80% of that without question. That would be 108k. Just have the deal written up as such on paper. Your mother sells you the home for 125k, 10k under market value, you put 20% down and borrow 100k. You then have instant equity in the home, the bank is happy and you saved your mother and own a home.

 

[300Busa]

When you write it up on paper it will look the same. Why even get the loan? The loan will show up on your credit record then and may raise questions with the bank you deal with.

If the house were to appraise at 135k, the bank should loan 80% of that without question. That would be 108k. Just have the deal written up as such on paper. Your mother sells you the home for 125k, 10k under market value, you put 20% down and borrow 100k. You then have instant equity in the home, the bank is happy and you saved your mother and own a home.

I think that I understand what you are saying, but probably not. I am not actually putting anything down, right? I am confused and trying to figure this all out asap.

 

[zukracer]

He is saying to have your mom sell you the house for 125,000 (sales price for contracts) and then go to the bank and say you need a loan for 108,000 (loan value for contracts), thus in essense appearing that you have put forth 17,000 in down payment or about 13.5%. You actually dont come off any cash in this, it just appears that you have Of course if she only needs or you only want a mortgage for 100,000 then ask the bank for that amount instead of the 108,000. Makes your down payment seem larger at 20%.

I'm not sure how this will work given the current mortgage market but this should work out for you and your mom, if you can get them to write the loan with these numbers

 

[Fate]

Hey bro, call me, I know some things you can do.. I will pm you my #. Too much to type.

 

[Fate]

I think that I understand what you are saying, but probably not. I am not actually putting anything down, right? I am confused and trying to figure this all out asap.

Banks are getting a little harder on this and probably would have hard time getting appraisal and done in a couple weeks.

You can negotiate short sale, a company I am going to work for has a 92 percent success rate. If you have an accepted contract and submit paperwork(overnight) you can pospone foreclosure for 30 days or more and help save her credit as well, I can try to talk you through it by phone.

 

[Fate]

What I would actually suggest after thinking about it is have your mother call the bank asap!!! A lot of banks with take as little as one payment right now to be considered current and add additional fees and payments to end of loan if you ask, they are in bad spot right now!!! Then try to get them to re negotiate terms to fixed mortgage, there are programs available for this right now. Then write a contract for deed to purchase between your mother and you and take over payments for next 6 to 12 months then refinance loan to your name potentially at 100 percent if appraised well. You show payments from YOUR account to BANK at refinance, or FHA loan with 3 percent down can also be put on property if it is in good shape. HAVE MOTHER CALL ASAP. If a short sale ends up being better then I will send paperwork you will need to you and will check with my office for contacts for you to call or can have there office negotiate it for you, I think they charge 600 dollars (which is well worth the amount of work involved). None goes to me by the way, it is a service our office uses.

 

[300Busa]

Hey bro, call me, I know some things you can do.. I will pm you my #. Too much to type.

PM sent back

 

[Ranger]

Alright Fate!

 

[Mr Bogus]

not sure you can get a loan on the downpayment.. (you usually have to provide proof of where the money came from too, no gifts etc allowed on my programs).. if you have a 401k and this is your "first home" you can pull from there without penalty (FHA loans)

good luck!! great move to make but you are not kicking your mom out on the street are you?

 

[Fate]

not sure you can get a loan on the downpayment.. (you usually have to provide proof of where the money came from too, no gifts etc allowed on my programs).. if you have a 401k and this is your "first home" you can pull from there without penalty (FHA loans)

good luck!! great move to make but you are not kicking your mom out on the street are you?

+100 especially if it is a government funded loan such as FHA, it is impossible. There use to be special programs to gift the money and you had to pay a fee but those are now illegal. any fanny or ginny based loan will not allow this. Most secondary programs are now requiring 30 or more percent down in the Florida area. That is why I mentioned the idea of fixing current loan and doing a contract for deed. This is the best bet. There are some creative ways to take advantage of the new programs out there and the bad situation banks are in. They will say they will not negotiate but a bank takes a huge loss on a foreclosure and most is not seen by the regular person not familiar with the system. They have huge legal fees and each bank must secure funds over the loan amount for each house they have a loan on and the percentage is determined by that amount of foreclosures for that year. It can be as high as 10 times the money they loan. So it is better to take a huge loss on the property and avoid foreclosure than to take the house back. The problem is they are overwhelmed with foreclosures and they have to many to deal with and it is hard to get ahold of the loss mitigation offices.

 

[Mr Bogus]

Great info, I would sure like to take advantage of some home prices right now.. how do I get around the 20% downstroke now? grrrrr..

 

[99'busa]

Hey bro, call me, I know some things you can do.. I will pm you my #. Too much to type.

 

[Fate]

Great info, I would sure like to take advantage of some home prices right now.. how do I get around the 20% downstroke now? grrrrr..

There are ways... There is a flux in the market down here... Interesting stuff. I tried to get into another field and am getting drawn into it again. Will be working with the foreclosures around here. There is alot of interesting ways to buy now, going back to the creative financing ideas of the 80's and people are more apt to try creative ways to get out of losing their homes or having a foreclosure on their credit.

 

[Mr Bogus]

I suppose if a guy had the capitol to invest, we must be getting awful close to a great time to buy...

 

[Fate]

It is a good time to buy but not sell. Holding properties and renting is a great tool right now. Rents are at a all time high. Market will get better and loan programs are coming back already so value will start to increase as well. Alot of people have pulled cash out of the stock market to invest in real estate. We have alot of European buyers flooding our market taking advantage of our weak dollar and cheap houses down here.