Okay, so yesterday I found a house I want to buy. My credit isn't HORRIBLE, but it's definitely not good. I have no car loans, credit card debt from years ago ($2000) that came to a judgment that I did not pay. I owe Wisconsin money for tickets, and really have no intention of paying them because they just take them out of my taxes anyways. Other than that, I don't have any debt. The asking price for the house is $29,900 but ideally I'd like to get a loan for $60,000. I know that's pushing it, but meh. The house is also out of state (if that matters) and has a few years of backtaxes. Are there any programs or anything that will work with me? For the most part I fly "under the radar", always pay cash for things, etc. I'm hoping I can get this place because I'm thinking I'll be able to make a bunch of money on it.
Actually, it's in a great location. The neighborhood was shit ten years ago- but since they knocked the Robert Taylor Homes down, it has improved drastically. Many of the homes on the block are teardowns (usually all brick), some older stone homes, all very nice architecture. It's less than a mile from the lakefront, and a 3 block walk to the train. The neighborhood is continuing to improve as well, and in another 10 years I'm sure it'll be worth 1.5 if not 2x as much as it is now. Part of the reason I want it.
I know that when I bought my house, it was quite honestly a pain in the ass. They wanted a ton of paperwork from me, and this this a bank that I have used for the last 8 years. I have had no default accounts, and only 1-2 late payments in so much time. My credit used to be 690+, although when I bought my house the score was down to 630 due to my divorce debt problems (even though all was paid on time with exception of 1-2 late payments). Mortgage companies are being really picky with their customers nowadays. Here's a quick and dirty example of what I needed: - Proof of last 2 years of renting (with references, and they did contact each to verify info) - Proof of all finances (proof of income with last 2 year's pay stubs, proof of all open loans and credit accounts, proof of current utility bills to show they were up to date, etc...) - Also had to provide proof of having money to pay closing costs (which is generally around 5% of the total purchase price) - Had to pay one year of home-owner's insurance up front, plus one year of flood insurance up front (amounted to ~$2500) - Had to pay for all home inspections (mold/termite inspection, VA inspection, all included in closing costs) - Also had to pay the loan application fee up front, which was somewhere near $150 That shit was expensive. Much more so than I had expected. My loan was $0 down, though. I am ecstatic now that it is all done, but it sucked. Your best bet is to go in and talk to your personal bank. If they are a smaller bank then you will honestly have your best chance. Most smaller banks take their personal opinions into judgement when doing large loans, vice what the paperwork tells them right off the bat. Your bank might be able to work something out for you. I can only imagine that they will require some amount of money down (maybe as high as 10%). ~Will Courtier~
Ah. That's a lot more than I need, and I'm not totally sure but I don't think I'm going to need half of the shit you need when you buy a "normal" house. I don't need a realtor to show me the place since I already took that upon myself, I don't plan on hiring contractors for anything except the roof really. The furnace is still there and appears to be in working order, piping is half there and I can do the rest, electrical I can do, drywall I can do, etc. I would also probably be splitting this with my business partner, that would for sure make a difference. I know I'd have to check with city codes to see what can and can't be salvaged, what I'll need to do, and so forth. The house that is 2 lots down sold for $414,000. Granted it has all kinds of top of the line stuff inside of it, and is brand new (a teardown- built in '07)... but that still goes to show. Anyways, if anybody cares to look on StreetView, the house is 520 E. 45th Street, Chicago 60653.
i hate to say it but its not looking too good from where i sit. you arent 'playing by the rules' that the banks run with. they dont like this. they want you to show that you are responsible with money, and the only way to do that in their eyes is to use a credit card and keep it under control. have a car loan and keep it paid up. etc. your credit is DEFINATELY hurt by a few things i see right off the bat: -negative judgements (tickets) -charge off (shit will haunt you for a long time) -no installment loans (car, etc) -no real estate loans (ya i know but it still kinda hurts your score) -no revolving credit (credit cards) i dont mean to sound like a dick, i just want to get it out there so that you can fix it. when my whore fiancee left me in iraq i sat down and figured out a bunch of shit, and one of them was getting my finances in order. I had many of the same issues you have now, and the only way to 'fix' it so that you can do anything before like fucking 10 years from now is to face it head on and take care of them. pay your tickets, that's a big one. contact the credit card company and ask for a settlement on your 'alleged debt in your name' (dont own up to it, research this and statue of limitations first). refinanced student loans are classified as installment loans, so if you have student loans try to refinance them to check that block. you can get a prepaid credit card that reports to the 3 agencies, basically you give them like $200 and then they give you a cc for $200. It helps to build your credit up. use the cc for like gas and pay most of it off, leave like $5 every month. you should also get a free credit report pulled and that will give you detailed info on bad shit that you need to look at. again, just trying to help as i was in almost the same exact situation a few years back, now my shit is gold. it dont take long for the banks to like you again
What the hell neighborhood has one house for $29k and $414k on the same block? I honestly don't comprehend the upper midwest. Editish: Also, don't think they're going to give you a loan for twice the price of the house.
To the right, if we're looking at the same trees. Lol. And yeah I had a feeling this wasn't going to look too good, so hopefully I can talk with my business associate, maybe put a little under half down, and see if the bank will just shell out a personal loan, which they probably won't. Or get my dad to invest the other half. Or just get my dad to buy the house (with a loan of course, which he just had that kind of cash laying around). I'm fully aware of what statute of limitations is. I will not get a car loan. I'm sorry, I can't see the value of spending THAT much money on something that I'm going to throw away in 6 months. I've had a brand new car before, and got rid of it rather quickly. Never again will I make a car payment. The prepaid credit thing is actually a really good idea. And Smersh: that's how things go in Chicago
hah not meaning that you should go out and get a car loan, although those are the most common installment loans i believe. just some sort of installment loan would help your credit although not having a chargeoff account and judgements would help like so much more
Yeah what can I say, I owed a little over $1000 at the time. I went into their phone meeting at the courthouse with the credit card company's attorney. I told them what I could pay at the time, and when I would make this payment. They kept trying to up it on me, I told them I couldn't do that right now. The bitch attorney basically told me you pay what we say or we're not going to work with you, so I told her "well looks like you're not getting anything then, have fun trying to get your money", and left. Granted I was also a stubborn 18 year old, but I feel the same way now. They said they'd work with me, they didn't, so meh.
The only downside I see from a bank's point of view, is that they generally don't want first-time home buyers to buy fixer-uppers. They generally want you to buy a house that is fairly new, and 100% code compliant to help protect their investment. When you start doing major repairs on the home, there is a possibility that you may do catastrophic damage to the home, which could in fact render it uninhabitable. That's why most banks (at least the ones around here) won't even loan on homes that are foreclosed unless the buyer already has another home and also provides a huge chunk of change as a deposit. But, I hope your bank will think differently. Although I am saying all of the downsides, they could potentially offer you a good deal. I really hope they do, as it is one hell of a good time to buy a home! You are also a perfect buyer since you can do pretty much all the work yourself. ~Will Courtier~
I hate to rain on you're hopes Nidex. You'll not get a homeloan for that place. If it were a good deal, investment firms would have scooped it up . They monitor city/tax records and scoop up places that can actually turn a buck. Those worthwhile properties never even make it to market. In the latest round of buy-ups, they are all being turned into rentals. My business has turned to caterinng to these clowns and I now make 90% of my living off of income properties that are scooped up from the overabundance of inventory. If that property has any form of value on it, it would not be currently available. Banks are more inclined to offer principal to investments and make more by doing so than by "helping out" people who just want a home. The banks that survived the housing crunch had contingencies in place for when the inevitable collapse happened. They didn't get big by being thoughtfull of everyday people but instead by putting profits ahead of all else. If you are real fortunate, you may be able to find funding through private family investors. I see real property loans made by family trusts a lot. Usually the interest is double or tripple what the lowest rate at a bank or mortgage lender would be. On that amount the mortgage would/should still be managable. Check the want-ads of the real estate section of the newspaper or see some mortgage councilors. I'd steer clear of craigslist, too many of those ads are real scams.
Yeah I wasn't getting my hopes up because I figured there wasn't much luck in getting a home loan for it, but meh. There's usually a loophole somewhere. I'm still going to try and buy it. My dad likes the idea as well so maybe we can pay half, and then he pays half... or something like that. It's been sitting for 4 years so I'm sure it's not going anywhere within the next few months.
Do yourself a favor and check the county records for condemnations and/or, easements, assessments and judgements on the property. Could be that it'd realistically take $100,000 plus to get a permit or certificate of occupancy if at all posible. There's usually a reason that a place stands vacant. Usually with a basket case place, the lot is worth more without a structure on it than to leave the building standing. I hope this turns out to be a diamond in the rough that can actually turn itno a good deal for you. But definately check it out with the county clerk/recorder. It's a matter of public record and all negative actions on the property will be on record there. The reason I bring this up is that without a title search through an escrow insurance firm, you'll be responsible for those discoveries yourself. Around these rural areas I live in, things such as meth lab clean up, chemical contaminations including lead, asbestos, murcury petroleum distilates can cost into the millions. A few people bought "owner contract" properties and ended up biting off a hell of a lot more than they bargained for when they went to get the neccessary permits. Good luck, it may really be worth checking into but protect yourself and investigate all you can about the property.
In my experience.. homes that are under $50k are never worth the investment. If the house is that devalued.. how much is the land worth? I appraised a few houses under $50k and they were all in the ghetto and beat as shit or were built by the homeowners and required so many fixes to get up to code that it would never be worth it. And getting a loan these days isn't like it used to be. Especially one that is more than double the cost of the house. It will never leave the underwriters desk.
Unconventional financing will be the only hope. Cash would be the best option. I picked one up for 29,000 and two months later had it up to code and valued at 165,000. But I was in the right place at exactly the right time with the right amount of cash and besides, I knew how to get rid of the smell of a two week old grampa corpse. :wink: But I did still check out the property at the county clerk's office before signing the papers.
Yeah, I was already planning on going to the office downtown and finding out what the deal is with the place, before I tried getting any financial aid. That would be next week. I would have to assume it has about $12k in backtaxes, ~$3k/yr for 4 years.
Just don't do anything until you have an independent appraiser or inspector check out the place. Which you'll have to get anyways before your loan will go through. When I was an apprentice real estate appraiser we met a bunch of optimistic home renovators. We were constantly crushing their dreams due to stuff like sinkholes, termites, improper building techniques, exterior obsolescences, rot, mold, etc... There's a reason as to why this home is so cheap and I know you aren't naive or anything so I'm sure you're skeptical about all of this as well but just be careful man.
What your credit, under 650 they usually wont touch you. if you have judgments on your history, they wont touch you. if you have delinquent bills (state of Wisconsin) they wont touch you. Nobody is going to loan you 12,000 dollars to pay back taxes. unless your putting 20% down, they won't loan you money for a house in that kind of condition. Really the only way to buy it would be to walk in with 45k cash. fix your credit and get a home equity loan.
After the housing crash getting a loan at all is a challenge. Getting a loan for more than the value of the house would be impossible, even if you had good credit. If you're going to fix it up and make repairs those funds would have to come from elsewhere. Also, what is the school district rating? Based on the price of the house I can guess, but if the schools are shit you don't want to own a house there. Trust me.
No idea, but 99% of CPS schools suck, so probably shitty. Anyways like I said half could be paid in cash, maybe more. I just didn't want to pay out of pocket at all when I could get a loan and pay it off. But whatever, I'm gonna look more into what the deal is this week.
