Any mortgage guys around?

[fluidimagery]

My wife and I have been living in a townhouse for about a year which we closed on the week of the wedding. Today is our 1yr anniversary and we've found a house that we like.

The house itself is 5 yrs old but needs some work to bring it up to where we'd like it. It's listed for $474k but is on 3/4 of an acre overlooking a horse farm with an preserve on the other side. The avg home sale in the community is around $950k so it's really a great situation and we want to look further into the possiblity of living there.

We purchased our townhouse for $365k a year ago and is now valuved at around $450k (probably get 435k).

Problem comes in where we don't really have enough to make a solid downpayment on the new house and don't show enough money to get a mortgage on the full amount until we were to sell the townhouse. My wife's a teacher and I'm self employed.

What are our options?

 

[crox99]

I would take a HELOC on your current condo and use that as a down payment and when you sell it pay it back. But make sure that you can afford to pay for a couple of months 2 mortgages.

 

[TimberTDI]

A family member just did the samething JP suggested. He took out a HELOC to cover his downpayment and closing cost. But also as JP said, make sure you can cover both mortgages in the meantime.

Have you spoken to a realtor, to see how fast you may be able to sell your townhouse?

Steven

 

[fluidimagery]

Thanks, I'll take a look into that.

The monthly payments on the 2 mortgages aren't a problem. Just that big downpayment is. Money is tied up stocks, and we have a habit of spending money we have left over on toys (fish, time shares, boats etc)

I'm not sure if a 5% down stated income mortage would be an option as well. The house already appraises for more than the selling price and it's forsale by owner. Another possiblity is if the seller agrees as does his attorney he can claim we purchased the house for more than we really did and use that money for the closing and possibly even the down payment. A sellers concession is another option and just roll the closing cost in.

 

[masterswimmer]

#1 - the purchase price of the new home for LTV, irrespective of the higher appraisal, will only be for the actual selling price. Not the higher appraisal.

#2 - If the seller were to agree that the fraudulent higher selling price was the actual selling price, you'd still have to show the transfer of funds to the seller as your downpayment.

#3 - A HELOC can possibly work. However, I didn't notice anywhere how much equity you've got in your townhouse. Did you buy it with 20% down? 5% down?

#4 - Most lenders (some will) will not allow any cash out on a refi or HELOC based on the current appraised value if the original sale date is less than 2 yrs. ago. Many lenders will only use the original purchase price even though there is a higher appraised value. After their loan has been 'seasoned' for two yrs. they will then use the current appraisal.

#5 - Seller concession is a great option when you're short on cash.

 

[Adamc1303]

What's your credit score?
Remeber when taking a heloc if it a zero closing cost heloc you will pay the closing costs if you close the line withing 24 months with most banks. Some only require 12 months. Either way between mtg tax and regular title fees you will end up paying at least 2.5% in closing costs for money you really need short term. If the house you onw is in the 5 boros you will pay 1.875% in mtg tax alone. Plus the only way you will pay off the line is by selling whih means you will be paying transfer tax as well. As far as inflating the purchase price in todays market it is risky and not worth it. Your best option would be to get 95% financing with a seller's concession. Once you sell your other house you can pay down the 2nd lien. The only down side to that is that your rate will be through the roof. Because the rate on the first lien will still be affected by the fact the the CLTV (combined loan to value) was 95% at the time of closing. See if you can get a private loan from capital one or BOA they always send offers in the ,ail for loans up to 40k with no collateral. They advertize that they start at 8.99& but they really are 15% to 20%. Either way it's short term so it's worth it. Don't get freaked out by that rate it's only short term. On a 40K loan the difference between 15% and 8.25% (prime rate) is $275.00 a month but if it's only 3 or 4 months it's your best bet. Call me if you need more help or if you want a good deal (718) 732 0319 or [email protected]. I have been in the mortgage industry for 5 years.

www.fmm.com or www.trumpmortgage.com