CREATIVE FINANCING IDEAS

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Submitted by Nazzy_17 on October 19, 2013 - 11:01pm

I'm interested in buying a home right now and putting 80% down and would just need to finance 20%. I can't qualify for a mortgage right now since I'm technically unemplyed and will be starting a new job in 8 weeks. Are there any ways for me to get financing for a small amount? I have equity in other properties I own outright with no mortgages that far exceed the amount I need to borrow-but again, can't tap the equity right now because of employment situation-any thoughts??

Submitted by spdrun on October 19, 2013 - 11:06pm.

If the properties produce income, you may be able to work with a local bank/credit union to tap them (up to 65% of equity or so). You won't get a GSE loan, but portfolio lenders may work with you if the deal makes sense.

Submitted by SD Realtor on October 20, 2013 - 12:57pm.

You can easily get a hard money loan. PM me if you would like details.

Submitted by spdrun on October 20, 2013 - 1:05pm.

Sure he can, but if there are options at 5%, why would s/he want to pay 9% or more with points up front?

Submitted by Nazzy_17 on October 20, 2013 - 5:07pm.

Thank you for the information.

Submitted by CDMA ENG on October 20, 2013 - 5:54pm.

Ok...

Now I am really going to show my ignorance of home lending but why wouldn't a bank give a loan on this?

With 80 percent down it would be, at least in a traditonal lending enviroment, a sure bet.

Person defaults you get a whole chunk of change and the asset back.

I could see hesitentcy on the part of the bank if it was... say 20 percent... but 80?

CE

Submitted by spdrun on October 20, 2013 - 6:04pm.

The bank can't sell the loan to a GSE without meeting certain specific guidelines. Less of an issue if the bank keeps some of all of the loan on its own books. So yes, banks can and will, but you have to work with a bank that can be flexible.

Also, keep in mind that the California Homerenters' Bill of Wrongs hasn't made it terribly easy for a bank to "just foreclose" and get their money back at the sheriff's auction.

Submitted by evolusd on October 20, 2013 - 6:15pm.

I agree with spdrun - local bank or credit union that has portfolio options may work. You will still need sufficient income from the rentals to cover all existing and proposed debt service at a reasonable DTI. Regulators require that cash flow be sufficient regardless of collateral position.

Submitted by SK in CV on October 20, 2013 - 6:22pm.

spdrun wrote:

Also, keep in mind that the California Homerenters' Bill of Wrongs hasn't made it terribly easy for a bank to "just foreclose" and get their money back at the sheriff's auction.

buncha whiney ass banks. It certainly hasn't made it hard.

Submitted by lookingtobuy on October 21, 2013 - 11:59am.

Banks typically use cash flow as a primary repayment source, in contrast to a pawn broker. As described prior, you may be able to use your rental income from you 1040 schedule e or your employement lender to satisfy your D/I requirements.

Submitted by lookingtobuy on October 21, 2013 - 12:01pm.

Banks typically use cash flow as a primary repayment source, in contrast to a pawn broker. As described prior, you may be able to use your rental income from you 1040 schedule e or your employment offer letter to satisfy your D/I requirements.

Submitted by spdrun on October 21, 2013 - 12:13pm.

.

Submitted by CA renter on October 21, 2013 - 4:01pm.

Or get a hard money loan from Piggs who'll accept principal plus interest when you get the job and can refinance into a traditional loan.

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