royhardin asked:
I am about to buy a home. It has over 10% equity based on a current appraisal than I am paying. I have sunk a lot of money into to fixing it up while I was living there and renting. (Much more than the 10% equity.) I am trying to see what options I have to get some of that back at closing. The seller won’t be any help. I am actually still paying (and to pay) some of the people doing the work. I was told that there may be a way to roll this cost into the purchase price. Is there someway that I could add to the price (still under appraisal value) and have that money go directly to the vendors who did the work? (For the ones I still have to pay, they are then paid. For the ones I already paid, could they reimburse my original payment and rebill me to get paid at closing?) Not going to do anything illegal. But if I don’t have to wait months for an equity loan, why should I? My credit is good (great if not for this improvement debt) and income/job excellent. Options? Thanks.
I am about to buy a home. It has over 10% equity based on a current appraisal than I am paying. I have sunk a lot of money into to fixing it up while I was living there and renting. (Much more than the 10% equity.) I am trying to see what options I have to get some of that back at closing. The seller won’t be any help. I am actually still paying (and to pay) some of the people doing the work. I was told that there may be a way to roll this cost into the purchase price. Is there someway that I could add to the price (still under appraisal value) and have that money go directly to the vendors who did the work? (For the ones I still have to pay, they are then paid. For the ones I already paid, could they reimburse my original payment and rebill me to get paid at closing?) Not going to do anything illegal. But if I don’t have to wait months for an equity loan, why should I? My credit is good (great if not for this improvement debt) and income/job excellent. Options? Thanks.
Tags: Appraisal Value, Job, Money
Unfortunately, when you purchase a home the lender will base your loan on the appraisal or the sales price, whichever is lowest.
Investor guidelines do no allow the buyer to get cash out at closing, regardless to whom it may be paid.
I am afraid that you are going to need that equity loan after all.
See if the contractors have leins on the property. I doubt it, but if they do it may give you a little leverage. Talk to your loan officer (best if you’re using a smaller company than a large bank) and see if they can give you any straight answers. Also tell the seller that you will not pay them for equity YOU put into the house, you’ll be happy to pay what it was worth when you started renting it. Look over your option to buy agreement if you wrote one up, there may be a loop hole provided for you. I hope you can figure it all out. Good Luck!
for over 3-6%, it’s very difficult to do it that way.
Set up a second mortgage or HELOC the day after close. (harder to find, but still exist.) Use that to pay the contractors.
anyone with a lien will have to be paid at close.