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Established Member
sok454
Posts: 54
Registered: ‎06-06-2012
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Forclosed properties

So DW and I have found a property that is a Homepath home and has been priced about 60k under what the neighborhood prices at.  Basically all the houses in the neighborhood have gone for 265-280 in the last 2 years.  They currently have it marked down to 215k.  We have gone thru the house 2x's with our contractor and there are obviously items that need to be fixed, basically updated fixtures, trim painted, floors updated (although they just put in new carpet... looks cheap.  There was water damage in the basement due to a broken faucet outside that has been repaired. (although the company did a horrible job ont he dry wall... went from 1/2 to 5/8's and just tried to smooth it out)  My question is how hard will it be to get financing while we still own our current house and want to put it on the market?   I assume the bank will just look at the DTI and determine if we are eligible.

 

Second question.   Would adding a guarantor tot he note be a good idea if the person was willing to do so?   They are high earners and high net worth people. 

 

 


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Valued Contributor
IOBA
Posts: 2,694
Registered: ‎08-13-2009
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Re: Forclosed properties

1.   Can you afford to carry two mortgages?

2.   Can you afford to put 20% down?   I found that if I put 20% down, the lender did not require an inspection.

3.   The lender would look at the big picture for everyone...that would include income, debt, legal stuffs, and credit scores.   Does adding a third person to the mix improve your DITI?  Whoever has the lower credit score --  the bank will be using their score to determine interest rate.

 

I had quite the experiences before finally being able to close on a house.  With each lender I spoke, the thing was the same - 20% down - no inspection.  On my own (without telling the lender) had my own inspections done.  I would recommend you do this.

 

One lender told me that if they knew about an inspection, they would know about any problems, and then funding would be contigent upon the problems being fixed and proving the work had been done.   When I hired an inspector (completely on my own, without the real estate or bank recommending someone), I made it very clear on the phone that he worked for me, not for my bank, and he was NOT to give any information to anyone else BUT me.

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Senior Contributor
StartingOver10
Posts: 4,207
Registered: ‎03-06-2010
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Re: Forclosed properties

[ Edited ]

IOBA wrote:

1.   Can you afford to carry two mortgages?

2.   Can you afford to put 20% down?   I found that if I put 20% down, the lender did not require an inspection.

3.   The lender would look at the big picture for everyone...that would include income, debt, legal stuffs, and credit scores.   Does adding a third person to the mix improve your DITI?  Whoever has the lower credit score --  the bank will be using their score to determine interest rate.

 

I had quite the experiences before finally being able to close on a house.  With each lender I spoke, the thing was the same - 20% down - no inspection.  On my own (without telling the lender) had my own inspections done.  I would recommend you do this.

 

One lender told me that if they knew about an inspection, they would know about any problems, and then funding would be contigent upon the problems being fixed and proving the work had been done.   When I hired an inspector (completely on my own, without the real estate or bank recommending someone), I made it very clear on the phone that he worked for me, not for my bank, and he was NOT to give any information to anyone else BUT me.


Wow IOBA, that is really, really very different than how we sell properties here.

Inspections are not required except for a WDO inspection for FHA and VA. The Wind MItigation inspection is required by the insurance co's here (FL) - but that is just because of the hurricanes. Other than the WDO report, the other inspection reports is never turned over to the lender here. The appraiser will do sort of a semi inspection for FHA and VA (to make sure the roof has a lifetime of 5 yrs remaining, for wood rot, and health and safety issues) but we don't turn reports over to the lender. Just the appraisal - which the lender orders.  Let me amend this a little - if you have a well and you are going VA or FHA then a water test is required and it is turned into the lender.

 

I am very surprised to hear that in VA the lender requires an inspection report. I guess each area has its nuances...

Valued Contributor
IOBA
Posts: 2,694
Registered: ‎08-13-2009
0

Re: Forclosed properties

All FHA and VA loans require their own certified inspectors go out.

 

When I lived and tried to purchase in Florida, the banks said the same thing - inspection a must, unless I was paying cash for the whole thing, in which case, I don't need to talk to them anyways.

 

And yeah, in this area, the lenders all required an inspection if the down payment was less than 20% down and the loan was conventional.

 

I found out that in WV - inspections are not required or expected.  

 

Lol - definitely a nice reminder to go talk to the lender about their requirements!

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Senior Contributor
StartingOver10
Posts: 4,207
Registered: ‎03-06-2010
0

Re: Forclosed properties

Actually I know the lender doesn't send out an inspector for FHA or VA loans here in Florida.

 

I've sold many, many hundreds of homes FHA over the last 30 plus years right here in S Fl and what the lender requires is only the WDO report, well water report where applicable and wind mitigation report for the insurance company. The whole house inspection report is not sent to the lender. In fact, a few lenders don't even require the WDO report any more, it is specific to each lender.

 

However, the lender will refer to the appraiser's walk through as an "inspection". It is by no means an inspection. The appraiser concentrates on the roof and wood rot issues and a few other items. The appraiser does have a checklist of items he has to examine for his appraisal, but a buyer would be in bad shape if they relied on the "inspection" by the appraiser. It is far better for the buyer to use a professional inspector to examine the entire home during the due diligence period.

 

So we may actually be saying the same thing - but in a different way. I have heard many loan officers refer to the site visit by the appraiser as "an inspection".  

Valued Contributor
IOBA
Posts: 2,694
Registered: ‎08-13-2009
0

Re: Forclosed properties

WOW.  In both Washington state and Virginia state, the lender required a FHA certified inspector go and do an inspection.  The report was given to the realtor and the bank  Financing was contigent on the inspection report and the appraisal.   The appraiser had to be FHA certified too.

 

Things really have changed!

Senior Contributor
Booner72
Posts: 3,889
Registered: ‎05-24-2011
0

Re: Forclosed properties

If you use Homepath Financing then you don't need an appraisal. In Oregon, inspections are not mandatory.
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