I live in MA. We are 50K in debt. We can afford a mortgage but only if we eliminate our debt. We also have perfect credit. I know alot of people are getting creative these days to sell their homes. Is there a way we can get cash back at closing to pay off our debt so we can afford the mortgage? Please don’t answer with SPAM, I will report it as such! We have already contacted banks and the we already know our situation so I don’t want an answer that tells me to call you just so you get a lead because you will waste your time on us. I just want to know if people do this.
Very difficult.
First, the house would have to appraise for the higher amount. Let’s say, for example, that you want to buy a $400,000 house. And let’s say you went with an FHA loan, so you’d only have to put 3.5% down (it’s 3% now, rising to 3.5% in January). So you’d have to come up with about $15,000 plus closing costs. Then you want/need another $50,000. The house would have to appraise at $450,000. Those deals are out there, but they’re rare.
On top of that, no lender (that I know of) is going to let you walk away with that amount of cash. Further, depending on the loan program, seller subsidies are capped at 3%-6%. That’d cover your closing costs but not much more.
So, I don’t see it happening conventionally.
Getting a bit creative, you might consider equity sharing. Find someone (a private investor) willing to lend you $50,000 in return for a good return on investment and fractional ownership of the property. Their investment probably would be secured by a second mortgage on your property.
With the stock market going down, a lot of people have pulled their money out and are looking for other investments. I have no idea what a private investor would expect, but it might be something like a 10% return on investment plus 10%-20% of any appreciation in the property at the time you sold.
Lots of people have cash and are sitting on the sidelines. A 10% ROI plus a percentage of any appreciation might be pretty attractive.
Hope that helps.
Yes! You can get a mortgage up to the value of the home as it is appraised. Then you can get the remainder from the sale price as cash.
This is usually done when refinancing a loan, but it can be done at an initial closing as well. The problem is that if the home is appraised higher than the owner is selling it for, why is he selling it for lower than it’s value? That is the question the bank will ask.
References :
Very difficult.
First, the house would have to appraise for the higher amount. Let’s say, for example, that you want to buy a $400,000 house. And let’s say you went with an FHA loan, so you’d only have to put 3.5% down (it’s 3% now, rising to 3.5% in January). So you’d have to come up with about $15,000 plus closing costs. Then you want/need another $50,000. The house would have to appraise at $450,000. Those deals are out there, but they’re rare.
On top of that, no lender (that I know of) is going to let you walk away with that amount of cash. Further, depending on the loan program, seller subsidies are capped at 3%-6%. That’d cover your closing costs but not much more.
So, I don’t see it happening conventionally.
Getting a bit creative, you might consider equity sharing. Find someone (a private investor) willing to lend you $50,000 in return for a good return on investment and fractional ownership of the property. Their investment probably would be secured by a second mortgage on your property.
With the stock market going down, a lot of people have pulled their money out and are looking for other investments. I have no idea what a private investor would expect, but it might be something like a 10% return on investment plus 10%-20% of any appreciation in the property at the time you sold.
Lots of people have cash and are sitting on the sidelines. A 10% ROI plus a percentage of any appreciation might be pretty attractive.
Hope that helps.
References :