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Profile picture for karthwyne

What type of loan to get?

I purchased a foreclosure home with cash, so there is no lien on the property. I would like to get a loan (1st mortgage, home equity?) to pay for needed repairs before I can move into it. What would be the best route to take and what type of program am I looking for?
I do have good credit, ~800, but recently became unemployed.
  • February 18 2010 - Stone Mountain
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Answers (5)

Best Answer

Profile picture for Erez Cohen
There is absolutey no standard financing without employment / income-  Your only option would be a hard equity loan-  I do caution you-  Rates are high-  Above 10% and fees are around 4% of loan amount + other normal state charges.  The question you need to ask yourself is if you need the money to rehab the home to then sell it and recoup your investment.  If that is the case you must make sure that you can sell the home for more than what you paid for plus the fees and interest to the hard money lender-  If not, do not get this type of loan as you indicate you do not have an income and paying a debt right now appears to be difficult.
  • February 18 2010
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The only loan that I can think of in your situation is a Private Money Loan  (Hard Money).

You may receive up to 60% LTV. Your first years payments could be included into your loan amount to give you a "breather" until you find employment and refinance into another loan with lower interest. ... Best wishes, Rudi
  • February 18 2010
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Profile picture for SoCal Engr

Prior to the whole housing/mortgage fiasco, we used HELOCs (Home Equity Line of Credit) for "fix up the house" projects. The good part is that it is a line-of-credit, so if you don't need it you don't use it...and you only pay for the portion of the credit that was actually accessed.

Typically, you got these through your bank or credit union. However, I don't know if anyone is still doing these, they may have become a victim of the banks' efforts to reduce their exposure on equity-based credit. You might want to check with your local CU/bank to see if they still have them.

However, it all seems moot without a job (i.e., need to show ability to pay back).

  • February 18 2010
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Profile picture for Clearpoint
A job should be your first priority, without income what is the point?
  • February 18 2010
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Profile picture for shapiroamg
Until you are employed, you will have an issue. The condition might be an issue unless you are seeking a rehab loan.
  • February 18 2010
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