friendly seller, help w/pulling cash for remodel - Posted by JEWEL

Posted by Bill Jacobsen on January 05, 2007 at 16:50:22:

In my opinion you are jumping the gun. A new 100% loan will probably have a higher interest rate (may not be true since Aunt had to acquire a non-owner occupied rate) than one obtained a year ago plus may have PMI attached to it. Also you have to contend with closing costs.

If the house appraises for $345K this means you can probably sell it for an amount within 5%-10% of that amount. You also would have a selling cost of about 6%-7%. It is possible that your loan of $350K could be $30K to $60K more than you could net out of your house. In other words, you are upside/down.

I have found that there are many people who qualify for higher loans than they end up being able to pay. Make sure that you are not one of them. Look at the amount you are currently saving on a monthly basis. This should give you a good indication of your ability to afford the new loan.

In my opinion you should wait another year and relook the numbers. Also you should have some additional money saved by then.

Good luck,


friendly seller, help w/pulling cash for remodel - Posted by JEWEL

Posted by JEWEL on January 05, 2007 at 15:06:24:

Aunt puchased house for us and we have made paymts directly to mortagage co’s for a year. we had a discharged bankruptcy 8/05 & now have a median credit score of 607. We are preapproved for 350k 100% financing. Outstanding loan is a 80/20 (currently interest only pymts) with the original $312k outstanding on it. House appraises for 345k. What is the best way to purchase/refinance house from aunt so its in our names and be able to get $15k at closing to do remodels and give some cash to Auntie for helping us out. Also we want to be able to do some flips after we secure our own residence.