Say i cant get a conventional mortgage and rent is astronomical in my area. Would taking out a personal loan to buy an auctioned house and refi into a mortgage (203) be a bad move?
Auction houses
Say i cant get a conventional mortgage and rent is astronomical in my area. Would taking out a personal loan to buy an auctioned house and refi into a mortgage (203) be a bad move?
RE guy here. It's risky but certainly doable. There are lenders that will float you for a few years (or owners that will give you what's called a "seller financing" deal) but the risk is if in a year or two you STILL can't qualify for a real mortgage, you may lose the home and your downpayment, depending on the terms of the loan.
Oh shit, cool. Is the interest any better through a lender that way, is there a specific name for that kind of loan? I have perfect credit but just started a 1099 after a year break from work so my understanding is that I'm fricked for a couple years
>Is the interest any better through a lender that way?
Of course not, it'll always be higher since it's riskier.
>is there a specific name for that kind of loan?
Just start networking with RE people and see if you can get recommendations to private lenders
>my understanding is that I'm fricked for a couple years
That may not be correct. Talk with a normal residential lender and get their opinion
Is there not a way to use the house as collateral, like a chattel loan? That was my idea of a bargaining chip, essentially a private loan for flipping but I'm living there instead. I live in the middle of nowhere so its very cheap to get auctioned off property
Illegals get 5k and free hotel stays, i wish i was a boarder jumper
>Is there not a way to use the house as collateral, like a chattel loan?
Yes, there's a few ways of doing what they call "creative financing". Seller financing is one of those ways. You find an owner that has a property (in this structure, you will want them to own it outright) and you give them a down payment and at that point you actually own the home. Then you make your monthly payments and after usually a small number of years, you have to terminate the loan either by paying it off or getting a traditional 30-year loan for the remaining amount and the owner gets paid off. These usually aren't advertised however asking your agent about it or cold calling owners of vacant looking properties if they are interested is a way to get your foot in the door.
Alternatively, you can also rent-to-own, where you pay an up front deposit and higher rent with an agreement to buy the place at a set price after a small number of years. Many times, part of the rent is kept by the owner in escrow as a down payment fund for you and you can use it as part of your deposit when approaching a traditional bank/credit union
As yet a third alternative, you can look for people who are distressed sellers and are falling behind on their mortgage. Then you offer to buy their place by "assuming their mortgage" (taking over the payments) plus giving them a down payment for their trouble. When you pay the mortgage off, you own the place outright
So, there's some options, though really if you have a more savvy seller you can make any type of deal you want as long as you have a lawyer write it up for you so it's clean and above board. Real estate is pretty flexible that way and there's many more ways than this to buy too, so do some research. HTH, AMA
You've been insanely helpful, thank you very much for clarification on all these options. Majorly appreciate you tbh
Glad it was helpful, you're very welcome
you're actually better off getting your real estate license and spending a little time in the industry looking for a good inside deal. nothing wrong with flipping but not using the house as collateral is always going to be more than a mortgage (unless you're a stupid frick and do arm or something).
I was looking at things and a new matched duplex here is 1.2M, everybody is trying to find a bargain or some miracle flip so unless you're moving laterally or believe shit will never go down there is no reason to invest growth funds in real estate in such a market.
>Say i cant get a conventional mortgage
Talk to a smaller bank. Alternatively stop being an illegal.
dont listen to the propoganda
you can totally get a house
i own land
honestly
theres 3 ways i see younger people getting housing
1. prob the easist for you is owner financing or rent to own some call it
put down payment few k and pay owner directly deal with title company lawyer they do everything
put a payment plan an dshit
2 yes take a giant cash loan and buy a house
pay large intrest screw it
if you make good money yes
honestly this is the best if you can get senpai too lend you money or just pay hight intrest
3fha loan back by freddy mac
you need to make good money
banks only look at debt to income ratio
frick credit score
you have to make 3k at least
if not have a wife
Im a poorgay so i only make like 50k annually, which means i qualify for the low interest usda loan but i dont have the work history they want so if i cant find a decent seller finance/rent to own ill tough it out and rent for a couple years. rent to own seems like the cheat code in my scenario
There are a few ways you can get fricked over in a rent-to-own. First, many owners charge a nonrefundable fee up front just to get everything set up. Second, unscrupulous owners target those that are likely to default so they keep all the money and can resell the same property over and over. Third, some sellers will fix the price of the home to above market to cover their risk should the would-be-buyer walk away. It's not perfect by any stretch and can become predatory.
That's what ive heard too. It seems a little less risky to get that sorted legally than buy an auctioned house and hope someone didnt cut out all the plumbing. Auction route would have me breaking and entering regardless to make sure shit was okay
FSBO can be sweet too since they get to split the income up over time, useful for tax reasons. It need not show up on a credit report since it's not done via the financial industry. I bought me first house that way then financed my current one via VA loan guarantee when I got orders. Paid off both but I refus to live in high COL areas which have no personal freedom. Mine are zoned agricultural.
I keep hearing stories of people paying above ask price on houses without even visiting them. Seems to me this is a sign it's a bad time to buy.
not diy. diy is a board for discussing the best trade job, particularly ones where they don't yell at stupid teenagers.
Look into USDA loans, if you're in the US