Forum: Mortgage
November 18, 2009
Habitable? Financing? Time-Bomb?
I visited a three-story (plus cellar) brownstone for sale. It sorely needs a gut renovation, and is priced accordingly.
(Asking price is 1.1M. The selling prices of post-reno comps are in the 1.6M to 1.7M range.)
To my eye, the exterior walls look okay.
The interior, however, is a wreck.
My concerns involve the roof and the electricity.
It looks like part of the roof is collapsing.
In the master bedroom (on the top floor) there is a hole in the ceiling, two feet in diameter. You can't see through to the sky, but you can see that the ceiling is rotting.
Toward the middle of that same room, not far from the hole in the ceiling, there's a home-made, impromptu, floor-to-ceiling support beam, made of cardboard boxes piled on top of a home exercise machine (!) which seems to be holding up part of the ceiling.
There are a couple of garbage cans in the master bedroom to catch the water when it rains.
Although most of the water damage seems to be in the master bedroom, there are additional water stains in other parts of the building, both on walls and on ceilings.
The view from the backyard shows some of the roof sagging over the back of the building.
As to the electricity, it was non-functioning in much of the brownstone. The realtor had to use a flashlight to show us around.
Does anyone have any thoughts about whether banks would be willing to provide a mortgage for a place like this?
Or, would banks consider the building to be unhabitable, and deny a mortgage?
I'd rather not make an offer and hire an inspector if I'd just be wasting my time and money.
Does anyone have any additional thoughts?
Thanks!
Mortgage Broker Recommendation
I want to HIGHLY recommend Adam Dahill (who posts a lot on this site) for anyone who's looking for a mortgage broker. We had a great experience working with him on the refinancing our loft in Williamsburg. He's well-organized and knowledgeable and helped us refinance at a reasonable rate- after we had an awful experience dealing with Wells Fargo directly. He can be reached at adahill@wcslending.com.
November 15, 2009
Wells Fargo Construction Loan
has anyone used wells fargo for an fha 203k construction loan? are you willing to share your experiences? i'd be very appreciative.
November 12, 2009
PMI/ FHA Insurance
My question is a little longer-term in regards to PMI. Has anyone had experience getting appraised "out" of PMI? Obviously, RE values have to go up (or your principal payments bring you to 20% equity) Just curious what experience people have had getting out of PMI or FHA insurance. Thanks.
November 11, 2009
Mortgage providers 4 families
We are seeking a mortgage provider that will lend against a 4 family in Brooklyn. Any ideas on smaller players that will hold the loan in their portfolio? Any thoughts on larger players that will be relatively more flexible as the buying dynamics are non-standard (three way transaction where a middle man is assigning contract to us)? Any thoughts are helpful!
November 10, 2009
Home Equity Line of Credit
I'm considering applying for a Home Equity Line of Credit as I am starting some renovations on my 3 family in Brooklyn. Anybody out there have opinions of the pros and cons of such an operation, and the risks involved? Any experiences good or bad?
November 3, 2009
Mortgage Questions
Hi,
I was hoping someone can help. I am bidding on a 3 family 4 floor unit but plan to occupy the triplex and rent the garden apartment. The property is solid but needs a $200k renovation - new 2 kitchens, 3-4 bathrooms, new wiring, flooring. How should we pursue the mortgage?
Here is are the stats: -
- looking to close on the property at $1.1M
- want to place 25% down payment ($275k) which will leave a mortgage of $825k.
I already have a commitment from my credit union for $950k+
Question is how should I go about financing the renovation? Do I have to take a $1.15M mortgage - would I need to put more money down?
Thanks!
October 30, 2009
Coop & Condo Breakthrough Loans
Thought I would post guidelines for those interested in combining coop and condo units.
Combining of Two or More Units (Combo)
Written Approval by COOP Board for the Combination of the units is required
Appraisal:
Appraised Value to be based on an "as completed" combined unit per the plans and
specs
Appraiser required to use other similar size units for comps
Address if typical for market and implication on marketability
Renovation Funds would be held in escrow until completion- Estimate would come from general contractor.
Completion should occur within reasonable period post close.
Generally a maximum 180 day timeframe
Loan is not eligible for sale to Agencies or Shelf until work is completed.
Extensions possible but require justifications
Combos are considered as a Refinance
Unless units to be combined are purchased together
Three day rescission period applies
Special Lien Search & Closing conditions
There are two cases where we do a co-op (or condo) breakthrough, with #1 being more common:
1. Someone owns a co-op unit and wants to buy the unit next door (I've even seen breakthroughs where they buy the unit above or below their current unit). We treat the loan as a cash out refi, with our loan being used to pay off the current loan and purchase the new unit. We escrow for the actual construction work (the break through) to be done post closing.
2. Someone who does not own any units currently buys 2 adjacent units and combines them. This is treated as a purchase, obviously.
In either case, we must comp out the unit adequately and also show that this is somewhat common and customary to the area.
A few key points to keep in mind:
- the co-op has to approve the combination of the two units
- they'll need an estimate to remove the kitchen and create the doorway
- an escrow is created to make sure the work is completed
- the end transaction should be one loan for both units (treated as a cash-out refi)
- typically both units will be combined into one stock certificate however it's ok to keep two stock certs as long as they are both referenced on the security agreement.
October 27, 2009
Sales Contingency?
I'm selling my apartment and want to buy a new one, but need the money from my sale to go through to be able to pay for it. I know people are now doing mortgage contingencies but what about sales contingencies?
October 17, 2009
Good Mortgage Broker Needed
Hi there, can anyone recommend a good mortgage broker; particularly one that specializes in SONYMA and FHA loans?
Thanks!