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Is it possible to build on your house when...
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sfp0701
Liam's Mommy!
Member since 1/07 9764 total posts
Name:
Tricia
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Is it possible to build on your house when...
You owe more on the house than it is worth?
Piggybacking off the other thread. We are stuck.. big time because of buying a starter home and the crash. We cannot have a second child in this home. Not being dramatic.. it's that bad.
So, are there financing options for people that have no equity? As of next month we will have no credit card debt and my smaller of the student loans will be paid off plus DH and I will both have major raises by June. So we are in a position where we will have a lot more cash flow. We just don't have the money saved to pay for an extension. We have the property to make this teeny tiny house a little bigger and make it managable while still very modest. I hate that expanding our family is based on this house....
Do construction companies finance? Do banks/credit unions have options? I am asking because I honestly don't know and Dh and I have to do something. We even looked into a short sale so we could rent and we were told we would have to fall behind on our mortgage We are denied for every single modification program because we are on time with payments. It's so frustrating that the ones that get help are not the ones that are doing the right thing... vent over. 
Message edited 3/23/2013 8:18:04 AM.
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Posted 3/23/13 8:16 AM  |
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Re: Is it possible to build on your house when...
I keep seeing this vendor pop up on the side of LIF.
National Housing Renovation Council
777 Westchester Ave, Ste 101
White Plains, NY 10604
866-475-4859
www.nhrcservices.org
I don't know if actual construction companies would finance.
DH has a construction company and it's rare that he has that kind of money sitting around, especially because he has to pay his guys and his own mortgage.
Maybe some of the big ones though (????).
In the past we looked at refinancing through the bank and were in a similar boat......not having enough equity in the house.
It's frustrating.
I hope you can find some answers.
And please come back and share if you do!!!
I know a lot of people are in a similar boat who bought a few years ago.
ETA: Is there also the possibility that you could get a loan from family. I know sometimes this is not possible or a shaky road to walk down.
Message edited 3/23/2013 9:00:56 AM.
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| Posted 3/23/13 8:58 AM |
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sfp0701
Liam's Mommy!
Member since 1/07 9764 total posts
Name:
Tricia
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Re: Is it possible to build on your house when...
Posted by MorningCuppaCoffee
I keep seeing this vendor pop up on the side of LIF.
National Housing Renovation Council
777 Westchester Ave, Ste 101
White Plains, NY 10604
866-475-4859
www.nhrcservices.org
I don't know if actual construction companies would finance.
DH has a construction company and it's rare that he has that kind of money sitting around, especially because he has to pay his guys and his own mortgage.
Maybe some of the big ones though (????).
In the past we looked at refinancing through the bank and were in a similar boat......not having enough equity in the house.
It's frustrating.
I hope you can find some answers.
And please come back and share if you do!!!
I know a lot of people are in a similar boat who bought a few years ago.
ETA: Is there also the possibility that you could get a loan from family. I know sometimes this is not possible or a shaky road to walk down.
Thanks. Sometimes I see places that say financing availbale and I am always  wondering if it is really possible.
There is one person that has the money to loan but, she is a PIA and it would/could issues with my aunts and uncles. So, I won't go down that road. No matter what it means for my family.
We have to just bite the bullet and talk to the bank.
Just wondering there are any other options... anyone else have experience with that?
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| Posted 3/23/13 9:24 AM |
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Re: Is it possible to build on your house when...
First are you sure that the home is worth less than what you owe? Values have been coming up in the area where you live, especially since the hurricane. If you would ever want me to come take a look and provide a market analysis and value estimate, I would be happy to do that. I know the area well.
But assuming you are under water - You may want to look into refinancing with a rehab loan, such as an FHA 203(k) loan. I am familiar with 203(k) loans on the purchase side, but I know they can be used in refinancing, too. However, I don't know all of the rules and restrictions with that... you could talk to a mortgage lender and just get some info.
I work with Steve Simpson at U.S. Mortgage Corporation in Levittown all the time, and I've done 203(k) loans with him, so I know he's well versed in them. If you want, I can send you his contact information.
ETA - A 203(k) loan lets you roll the cost of repairs and renovations into your mortgage, so you would be increasing your loan amount, but also increasing the value of the home post-renovation.
Message edited 3/23/2013 9:55:07 AM.
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| Posted 3/23/13 9:54 AM |
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sfp0701
Liam's Mommy!
Member since 1/07 9764 total posts
Name:
Tricia
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Re: Is it possible to build on your house when...
Posted by Century 21 Dallow - Christine Braun
First are you sure that the home is worth less than what you owe? Values have been coming up in the area where you live, especially since the hurricane. If you would ever want me to come take a look and provide a market analysis and value estimate, I would be happy to do that. I know the area well.
But assuming you are under water - You may want to look into refinancing with a rehab loan, such as an FHA 203(k) loan. I am familiar with 203(k) loans on the purchase side, but I know they can be used in refinancing, too. However, I don't know all of the rules and restrictions with that... you could talk to a mortgage lender and just get some info.
I work with Steve Simpson at U.S. Mortgage Corporation in Levittown all the time, and I've done 203(k) loans with him, so I know he's well versed in them. If you want, I can send you his contact information.
ETA - A 203(k) loan lets you roll the cost of repairs and renovations into your mortgage, so you would be increasing your loan amount, but also increasing the value of the home post-renovation.
I have never heard of this type of loan. You can do this even if you are underwater?? I am almost positive that we are almost 100k underwater. At least according to the estimates I get from the town. The homes that are twice the size of mine are selling for what I paid. We bought in 04 and paid A LOT. I am going to have look into this. Can any bank or credit union handle this?
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| Posted 3/23/13 6:22 PM |
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Re: Is it possible to build on your house when...
We have the same problem. We need to add on or remodel to make this house more functional for a family. It's not really a small house but the layout is odd.
We are looking into a 203k refinance. It gets worked into your mortgage. It's secured against the equity that would result after renovations. Your house just has to appraise for the amount of the loan and whatever work you're doing to the house. I have no idea if I'm explaining this correctly, but it's hard to explain.
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| Posted 3/24/13 11:42 AM |
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Re: Is it possible to build on your house when...
Posted by sfp0701
Posted by Century 21 Dallow - Christine Braun
First are you sure that the home is worth less than what you owe? Values have been coming up in the area where you live, especially since the hurricane. If you would ever want me to come take a look and provide a market analysis and value estimate, I would be happy to do that. I know the area well.
But assuming you are under water - You may want to look into refinancing with a rehab loan, such as an FHA 203(k) loan. I am familiar with 203(k) loans on the purchase side, but I know they can be used in refinancing, too. However, I don't know all of the rules and restrictions with that... you could talk to a mortgage lender and just get some info.
I work with Steve Simpson at U.S. Mortgage Corporation in Levittown all the time, and I've done 203(k) loans with him, so I know he's well versed in them. If you want, I can send you his contact information.
ETA - A 203(k) loan lets you roll the cost of repairs and renovations into your mortgage, so you would be increasing your loan amount, but also increasing the value of the home post-renovation.
I have never heard of this type of loan. You can do this even if you are underwater?? I am almost positive that we are almost 100k underwater. At least according to the estimates I get from the town. The homes that are twice the size of mine are selling for what I paid. We bought in 04 and paid A LOT. I am going to have look into this. Can any bank or credit union handle this?
I am not sure of all of the ins and outs for a refi... but it's definitely worth looking into. I've worked on these loans in connection to purchases of buyer clients ... you can either do a streamlined 203(k) loan, if the renovations are under a certain amount (I believe it's $30K) and are not structural, or a full 203(k) loan, which is what you would need for an addition/extension.
It's a subset of an FHA loan, so any lender you go to would have to be an FHA approved lender. But I believe some banks have their own rehab/reno loan product (I've heard of Wells Fargo, for example). But you want to make sure that you select a lender that is well-versed in these types of loans. With a full 203(k) loan, you have a HUD planner assigned, you'll have contractors, architects, an appraiser, etc., and everyone must coordinate with each other and the lender. So you want to make sure everyone involved has done this before, because it is a more complex loan with some additional red tape.
I know with the 203(k) loans for purchase, the appraisal is sort of a 2-part thing... the house must appraise as is, and also post-renovation. So if the buyer is paying the seller $300K for the house, the appraiser will look to see if it's worth the $300K, but if the buyer plans to put $100K into the house to put a full dormer on (via a 203(k) loan, the house's projected value (with the dormer) has to be $400K.
But you should definitely talk to a mortgage professional to get more info about the logistics of it with a re-fi and whether you can qualify.
However, don't assume you are $100K under water if you are basing that on the assessed values for taxation purposes. That value does NOT equal fair market value. I was preparing a market analysis for a colonial style home in N. Bellmore last week. Based on the current sales in the area, I would price this home in the $529K to $549K range, but the fair market value for taxation purposes (on the my Nassau property site) was something like $380K! I refinanced my home in 2010, and the appraisal came in about $50K higher than what was online. The assessor's office is keeping assessments low to try to stave off the tax grievances that every homeowner files as a matter of course now, but it doesn't correlate the value. Plus, the market is changing.
Feel free to contact me if you want me to give you a valuation opinion based on current market conditions. It doesn't cost you anything, and I am always happy to provide that complimentary service. More info can never hurt!
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| Posted 3/24/13 12:24 PM |
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sfp0701
Liam's Mommy!
Member since 1/07 9764 total posts
Name:
Tricia
|
Re: Is it possible to build on your house when...
Posted by Century 21 Dallow - Christine Braun
Posted by sfp0701
Posted by Century 21 Dallow - Christine Braun
First are you sure that the home is worth less than what you owe? Values have been coming up in the area where you live, especially since the hurricane. If you would ever want me to come take a look and provide a market analysis and value estimate, I would be happy to do that. I know the area well.
But assuming you are under water - You may want to look into refinancing with a rehab loan, such as an FHA 203(k) loan. I am familiar with 203(k) loans on the purchase side, but I know they can be used in refinancing, too. However, I don't know all of the rules and restrictions with that... you could talk to a mortgage lender and just get some info.
I work with Steve Simpson at U.S. Mortgage Corporation in Levittown all the time, and I've done 203(k) loans with him, so I know he's well versed in them. If you want, I can send you his contact information.
ETA - A 203(k) loan lets you roll the cost of repairs and renovations into your mortgage, so you would be increasing your loan amount, but also increasing the value of the home post-renovation.
I have never heard of this type of loan. You can do this even if you are underwater?? I am almost positive that we are almost 100k underwater. At least according to the estimates I get from the town. The homes that are twice the size of mine are selling for what I paid. We bought in 04 and paid A LOT. I am going to have look into this. Can any bank or credit union handle this?
I am not sure of all of the ins and outs for a refi... but it's definitely worth looking into. I've worked on these loans in connection to purchases of buyer clients ... you can either do a streamlined 203(k) loan, if the renovations are under a certain amount (I believe it's $30K) and are not structural, or a full 203(k) loan, which is what you would need for an addition/extension.
It's a subset of an FHA loan, so any lender you go to would have to be an FHA approved lender. But I believe some banks have their own rehab/reno loan product (I've heard of Wells Fargo, for example). But you want to make sure that you select a lender that is well-versed in these types of loans. With a full 203(k) loan, you have a HUD planner assigned, you'll have contractors, architects, an appraiser, etc., and everyone must coordinate with each other and the lender. So you want to make sure everyone involved has done this before, because it is a more complex loan with some additional red tape.
I know with the 203(k) loans for purchase, the appraisal is sort of a 2-part thing... the house must appraise as is, and also post-renovation. So if the buyer is paying the seller $300K for the house, the appraiser will look to see if it's worth the $300K, but if the buyer plans to put $100K into the house to put a full dormer on (via a 203(k) loan, the house's projected value (with the dormer) has to be $400K.
But you should definitely talk to a mortgage professional to get more info about the logistics of it with a re-fi and whether you can qualify.
However, don't assume you are $100K under water if you are basing that on the assessed values for taxation purposes. That value does NOT equal fair market value. I was preparing a market analysis for a colonial style home in N. Bellmore last week. Based on the current sales in the area, I would price this home in the $529K to $549K range, but the fair market value for taxation purposes (on the my Nassau property site) was something like $380K! I refinanced my home in 2010, and the appraisal came in about $50K higher than what was online. The assessor's office is keeping assessments low to try to stave off the tax grievances that every homeowner files as a matter of course now, but it doesn't correlate the value. Plus, the market is changing.
Feel free to contact me if you want me to give you a valuation opinion based on current market conditions. It doesn't cost you anything, and I am always happy to provide that complimentary service. More info can never hurt!
Really? That is really nice! I will contact you in a few months. I really want to have all my finances in a row before I look into anything. That should be done by June. Thanks Christine. I appreciate all your responses and advice.
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| Posted 3/24/13 5:17 PM |
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Re: Is it possible to build on your house when...
No problem, Tricia! If and when you are ready to look into it further, just give me a call. I am happy to help.
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| Posted 3/24/13 8:10 PM |
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