If you can put down 30% or more, is a loan possible?

[AbbeyA]

Hello, I am wondering if any of you know the answer to this .... We are a little over 1 year out from chapter 7 discharge and 6 months out from the foreclosure and deed transfer of our former home. I understand about the 3 year rule after foreclosure for an FHA loan, however, if one has a significant downpayment on a home, is it possible to get a loan earlier than that date? Not just FHA, but maybe a conventional loan?

[AngelinaCatHub]

I sure would think so. It used to be standard operation to give a only with a 20% down payment. 30% is better and unusual. You have "skin in the game" so try it. If you don't try, there is only one answer.

Zero down is what got us into this mess. Everyone but Barney Frank knows this. Those who have been displaced REALLY know it. 'Hub

[AbbeyA]

We don't have it at this time, but I was curious about it. This sounds terrible, but I love seeing the housing market continuing to go down, down down. I'm looking at this as the "silver lining" of our situation. I don't think we'll buy anything for at least another couple of years, but I'm always curious about the possibilities out there.

[monkatom]

Just an FYI I had 50% down on a 200K house and was still turned down. I had a great DTI ratio, credit scores were high 600's low 700's. I tried several banks, and brokers. I ended up doing a hard money loan and even though I am 2 years out of foreclosure, no lates, etc I am still unable to refi until the 3 year mark. I know everyones story is different but this is just my scenario.

[AngelinaCatHub]

We don't have it at this time, but I was curious about it. This sounds terrible, but I love seeing the housing market continuing to go down, down down. I'm looking at this as the "silver lining" of our situation. I don't think we'll buy anything for at least another couple of years, but I'm always curious about the possibilities out there.

Other options and possibilities are, Contract for Deed. Pay down, pay as agreed to the owner, and when paid off he must supply Warranted Deed. In the event you cannot pay, you are not penalized and can walk away. Much like rent to own. I did this once and it was most agreeable. 'Hub

[Logan]

Just an FYI I had 50% down on a 200K house and was still turned down. I had a great DTI ratio, credit scores were high 600's low 700's. I tried several banks, and brokers. I ended up doing a hard money loan and even though I am 2 years out of foreclosure, no lates, etc I am still unable to refi until the 3 year mark. I know everyones story is different but this is just my scenario.

I'm curious if you think it was worth going with the hard money loan rather than waiting for your 3 years to be up?
I tried to buy a short sale property 2 years ago but backed off because it was taking to long and today I'm glad I didn't buy it because the market just keeps coming down. Who knows when the bottom will hit?
Logan


Logan

[HHM]

Down payment won't matter for any sort of FHA, VA, or conventional financing, sorry...but the time lines are the time lines.

I wouldn't go hard money...keep in mind, most hard money lenders do "short term" financing and that is not really what you are looking for. Don't fall for buyers rush...the market is not going up anytime soon.

[AbbeyA]

Down payment won't matter for any sort of FHA, VA, or conventional financing, sorry...but the time lines are the time lines.

I wouldn't go hard money...keep in mind, most hard money lenders do "short term" financing and that is not really what you are looking for. Don't fall for buyers rush...the market is not going up anytime soon.

We're not falling for any deal any time soon. I am very content with our rental and feel great about the future home we will eventually be able to buy. I totally agree that the housing market is not going up anytime soon -- I hope it keeps going down.

However, I still have times where I would like to have the security of home ownership and the knowledge that we won't have to move again in the near future. Thanks for the clarification on what is/isn't possible with respect to a home loan. Is there anything official on what lenders consider the "date" that applies to the 3 year rule? In our case, the home was sold at sheriff sale October 12th 2010. The deed transfer didn't occur until February 4th 2011. Some things I have read say that the date of sheriff sale applies, other things say the date of deed transfer. Thanks for any info you can offer.

[HHM]

Don't know the answer to that question, that issue is probably very much state dependent. Sounds like there must have been some sort of redemption period that exists after the sale. Generally, I would put my money on the "deed" transfer date, but I don't know either way.

[AbbeyA]

Thanks for your response, I have it set in my mind that it will be the date of deed transfer.

[JackBondLove]

We don't have it at this time, but I was curious about it. This sounds terrible, but I love seeing the housing market continuing to go down, down down. I'm looking at this as the "silver lining" of our situation. I don't think we'll buy anything for at least another couple of years, but I'm always curious about the possibilities out there.

In the financial world, you are what is called a knife catcher. If you hit it at the bottom, great! If not, there is a sharp edge to contend with ...

[mikemike]

Other options and possibilities are, Contract for Deed. Pay down, pay as agreed to the owner, and when paid off he must supply Warranted Deed. In the event you cannot pay, you are not penalized and can walk away. Much like rent to own. I did this once and it was most agreeable. 'Hub

I have always seen rent to own but never really looked into as i thought it was sort of a scam. Do you have more info it? I might be interested in the near future.

[tobee43]

I have always seen rent to own but never really looked into as i thought it was sort of a scam. Do you have more info it? I might be interested in the near future.

we did a rent to own... 100% owner finance deal. i set up a land contract for my daughters house, so the people are wrapping around an existing mortgage until they can assume it...if ever.

it can be done and i think we will be seeing more and more of these type of situations where the banks are being circumvented, as their criteria are getting stiffer and more difficult to meet, that is, if you want to ever own a home again!

[mikemike]

we did a rent to own... 100% owner finance deal. i set up a land contract for my daughters house, so the people are wrapping around an existing mortgage until they can assume it...if ever.

it can be done and i think we will be seeing more and more of these type of situations where the banks are being circumvented, as their criteria are getting stiffer and more difficult to meet, that is, if you want to ever own a home again!

The housing market is in bad shape so i would assume it would be easy to attain, right? So basically is taking over a mortgage until i am able to obtain a mortgage? I read that you pay say a few hundred more of the normal rent while some goes to towards a future down payment.
It is hard to get a mortgage now and days so this might be a new trend? i would guess this is better for those with not the best credit and no down payment.

[tobee43]

well actually mikemike it's not such a new idea: this is from another thread a while back on the subject of land contracts:


"Land contracts were very popular in the late 1970s and early 1980s. Back then, installment sale contracts, sometimes called contracts for deed, offered more attractive financing terms over the higher rates and rigid qualification standards of institutional lenders.
Land contracts began to disappear when loan requirements softened and rates dropped below 8%. But they have not vanished all together and, in fact, tiptoed back into the market in 2006."

What is an Installment Sale Land Contract?

Land contracts or contracts for deed are a security agreement between a seller, called a Vendor, and a buyer, called a Vendee.

The Vendor agrees to sell a property by financing the purchase for the Vendee.

The Vendor retains legal title and the Vendee receives equitable title.

The owner-carried financing can include an existing mortgage balance or the property can be free and clear.

Upon payment in full, the Vendor hands the Vendee a deed to the property.
All-Inclusive (Wrap-Around) Land Contracts

Wrap-around contracts contain an existing mortgage.

The Vendee makes one payment to the Vendor.

Upon receipt of the payment, the Vendor pays the underlying lender's payment and keeps the rest.

If the existing mortgage has a lower interest rate than the rate on the contract, the Vendor earns extra interest on money that does not belong to the Vendor.
This is how it works.

1.Say the sales price is $100,000.
2.The Vendee puts down $10,000.
3.The Vendee agrees to make payments on $90,000, bearing interest at 6.5%, payable $567.
4.The existing underlying loan is $50,000, payable at 5% interest with a payment of $268.
The Vendor earns 6.5% interest on $40,000 of equity, PLUS 1.5% interest on the existing mortgage of $50,000 and pockets $299 a month."


they work..and i believe they are coming back!!!!

it was from this thread: http://www.bkforum.com/showthread.ph...land+contracts