CREATIVE FINANCING IDEAS – Piggington's Econo-Almanac

This topic has 12 replies, 8 voices, and was last updated 11 years, 1 month ago by CA renter.

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October 19, 2013 at 11:01 PM #20809

Nazzy_17
Participant

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??

October 19, 2013 at 11:06 PM #767087

spdrun
Participant

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.

October 20, 2013 at 12:57 PM #767096

SD Realtor
Participant

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

October 20, 2013 at 1:05 PM #767097

spdrun
Participant

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

October 20, 2013 at 5:07 PM #767099

Nazzy_17
Participant

Thank you for the information.

October 20, 2013 at 5:54 PM #767102

CDMA ENG
Participant

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

October 20, 2013 at 6:04 PM #767103

spdrun
Participant

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.

October 20, 2013 at 6:15 PM #767104

evolusd
Participant

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.

October 20, 2013 at 6:22 PM #767105

SK in CV
Participant

[quote=spdrun]

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.[/quote]

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

October 21, 2013 at 11:59 AM #767121

lookingtobuy
Participant

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.

October 21, 2013 at 12:01 PM #767122

lookingtobuy
Participant

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.

October 21, 2013 at 12:13 PM #767124

spdrun
Participant

.

October 21, 2013 at 4:01 PM #767126

CA renter
Participant

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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