Guys, I DESPERATELY need advice/help vol. Potential 1st time home owner

[airforce1king]

Guys, I'm trying to purchase my first house. I been on Zillow for like the last month searching and there are soooooo many DECENT foreclosed houses in the area where I want to move to for like $20-$25K. Can I afford a more expensive house? Yes, yes I can. However, I'm a man who believes in living well below his means. I'm single with no kids and plan to stay this way for quite some time. A $25K house would be perfect and it would leave me with a mortgage of $200 give or take.

I went to my Credit Union to try and get some info and they explained to me they only deal with Home Equity Loans. They gave me a number of the lender they send everyone else to. I call their lender and talk to a gentleman. He explains to me what I'm doing is definitely a good idea especially at my age (27). It's hard here in Cleveland and the neighboring small cities. People are getting booted out of good homes left and right. I can cash in on one of these homes for a steal. Our conversation concludes with the gentleman explaining while I'm definitely on the right track, unfortunately they don't give out $20K loans SMH. If I was trying to buy a house for $60K then he'd be able to help me out. He suggested I also go to banks in the area of the home and see if they'd give me a loan since they're entitled to or something like that.

Now I'm back at square 1. A buddy of mine suggested I try to take out a "personal loan" from my Credit Union. Before I go that route, I decided to come and ask my NT brethren and see if you guys have any suggestions for me. Please hit me back with ANY info that you feel would help me in my quest.

P.S. My credit score is 713 (needs to be at least a 640). I have less than $3000 in debt and I make fairly decent money. These are the questions most people ask me so I'll provide the info to y'all...

 

[blackcease]

Basically 3 options

1. Save that 20K
2. Save as much as you can and borrow the rest from family. If the house is big enough you can rent out rooms and pay your fam back with the rent money + give them a little interest, tell them to look at it like an investment. If your people own, they can get a home equity loan or line of credit and give you the money from that.
3. If you have a 401k at your job, generally they let first time homebuyers withdraw down payment money from it, and you just pay it back later.

Outside of that, I think the options are minimal. Nobody is gonna give you a mortgage on less than about 50k, those are cash purchases man. And personal loans are pretty hard to secure with no assets. Take a year to get that bread up and buy, or like I said, borrow from fam if you wanna get in now while the market is still low. Good luck man.

 

[ronsweedroom]

Those 20k homes are usually a bidding start point for the home.  A lot of people get confused; depends on your market, but, continuing on, most people dont realize that foreclosures go to auction more often than not. Now if your market is soft then I can see a house selling for 20k. If that were the case, I would just get a loan or use balance transfers on my C.C. to get the property and start using it to gain me money.

Just remember to always have another house lined up when you sell to avoid taxes. Uncle sam takes 50% of gains from flipping houses so be smart and always have something in your name to keep from having to pay out your ***. If you're at a point where your mortgage is low/paid off, take out an Equity LOC and use that money to invest elsewhere. The interest is cheap so just pay your interest on time and make money, money, money.

 

[repsol1k]

Guys, I'm trying to purchase my first house. I been on Zillow for like the last month searching and there are soooooo many DECENT foreclosed houses in the area where I want to move to for like $20-$25K. Can I afford a more expensive house? Yes, yes I can. However, I'm a man who believes in living well below his means. I'm single with no kids and plan to stay this way for quite some time. A $25K house would be perfect and it would leave me with a mortgage of $200 give or take.

I went to my Credit Union to try and get some info and they explained to me they only deal with Home Equity Loans. They gave me a number of the lender they send everyone else to. I call their lender and talk to a gentleman. He explains to me what I'm doing is definitely a good idea especially at my age (27). It's hard here in Cleveland and the neighboring small cities. People are getting booted out of good homes left and right. I can cash in on one of these homes for a steal. Our conversation concludes with the gentleman explaining while I'm definitely on the right track, unfortunately they don't give out $20K loans SMH. If I was trying to buy a house for $60K then he'd be able to help me out. He suggested I also go to banks in the area of the home and see if they'd give me a loan since they're entitled to or something like that.

Now I'm back at square 1. A buddy of mine suggested I try to take out a "personal loan" from my Credit Union. Before I go that route, I decided to come and ask my NT brethren and see if you guys have any suggestions for me. Please hit me back with ANY info that you feel would help me in my quest.

P.S. My credit score is 713 (needs to be at least a 640). I have less than $3000 in debt and I make fairly decent money. These are the questions most people ask me so I'll provide the info to y'all...

DO NOT open a personal loan..those loans r unsecured high interest and usually range from 8-25% to where as the normal mortgage right now is around 3.5-4.5..and if ur wantin a house for personal use make sure u have it inspected before hand..gl

 

[mojodmonky1]

DO NOT open a personal loan..those loans r unsecured high interest and usually range from 8-25% to where as the normal mortgage right now is around 3.5-4.5..and if ur wantin a house for personal use make sure u have it inspected before hand..gl

did you not read the part about him not being able to qualify for that 3.5-4.5% mortgage rate since the loan amount is too low? how you trying to compare something to a product that is UNAVAILABLE?

 

[hombrelobo]

Check how much the homes listed @ $25k sold for. I'm curious. Also, I would be surprised if many of these $25k homes could even be financed given the condition of most foreclosures.

Check these things out and pls respond.

 

[mcraptor]

Check how much the homes listed @ $25k sold for. I'm curious. Also, I would be surprised if many of these $25k homes could even be financed given the condition of most foreclosures.

Check these things out and pls respond.

Would like to know as well, misread it at first and thought you meant 25k down payment. 20k for a home in insane even if it is Cleveland...

 

[hybridsoldier23]

Check how much the homes listed @ $25k sold for. I'm curious. Also, I would be surprised if many of these $25k homes could even be financed given the condition of most foreclosures.

Check these things out and pls respond.

Would like to know as well, misread it at first and thought you meant 25k down payment. 20k for a home in insane even if it is Cleveland...

I'm sayin... Where can I see these 25K homes. I'd like to pay cash and get down on that

 

[supremeape]

Is it a shack?
How many sqfeet?
Do people pay their rent in that area?
Post pictures OP.

 

[jayhood23]

Op is trying to strike while the iron is hot am I right Op?

Guessing you're not wanting to wait another year to pull the trigger?

 

[crcballer55]

Are you sure you can even get the home for $20K? I would think that investors would be jumping all over those with cash since the return rate from a rental like that would be HUGE.

Either way, Yes, the lender is correct. You likely can't get a mortgage for under $60K since it's not large enough for them to mess around with. The origination fees on most loans like that are usually around $6-10K, so you would need to come out of pocket with those too with something in that price range.

While the prices and interest rates are still rediculously low, I would suggest wiping out your debt and building up an emergency fund. If you're looking at homes anywhere near that price range, I'm sure there will be several thousand in repairs needed, not to mention ongoing maintenance (which is something most 1st time buyers don't factor in). Once you have those, have at least 15% saved for the down payment so you don't have to worry about PMI for too long.

 

[jbug88]

a $20k house?
where in the hell is this?
you sure you ain't leaving off some zeroes?

-J-

 

[repsol1k]

DO NOT open a personal loan..those loans r unsecured high interest and usually range from 8-25% to where as the normal mortgage right now is around 3.5-4.5..and if ur wantin a house for personal use make sure u have it inspected before hand..gl

did you not read the part about him not being able to qualify for that 3.5-4.5% mortgage rate since the loan amount is too low? how you trying to compare something to a product that is UNAVAILABLE?

What does stating a fact have to do with anything he qualifies for? Personal loans are too risky meaning OP should save for any house that low in price....OBVIOUSLY implying that we already know he cant get a mort under 50k-60k so that only leaves him with 1 option..evidently u didnt comprehend that part..sir

 

[mojodmonky1]

a $20k house?
where in the hell is this?
you sure you ain't leaving off some zeroes?

-J-

its all about location location location. im sure there are homes selling in this price range in cities that no one wants to live in (like Detroit). Heck, my company (independent finance company) had a home in Birmingham, AL that we couldnt give away. When we secured our mortgage on the property, it appraised at $125,000. At one point we had it listed for $6,000. No takers. We tried to just give the property to a local charity, but no charity wanted to take it because it was more hassle than it was worth. We eventually ended up just letting the city foreclose on past due taxes because it wasnt worth it for us to make the property tax payments for the deadbeat former homeowner.

 

[jbug88]

its all about location location location. im sure there are homes selling in this price range in cities that no one wants to live in (like Detroit). Heck, my company (independent finance company) had a home in Birmingham, AL that we couldnt give away. When we secured our mortgage on the property, it appraised at $125,000. At one point we had it listed for $6,000. No takers. We tried to just give the property to a local charity, but no charity wanted to take it because it was more hassle than it was worth. We eventually ended up just letting the city foreclose on past due taxes because it wasnt worth it for us to make the property tax payments for the deadbeat former homeowner.

I understand about location, but god damn, this ain't 1937...
mind = blown right now.

-J-

 

[mojodmonky1]

DO NOT open a personal loan..those loans r unsecured high interest and usually range from 8-25% to where as the normal mortgage right now is around 3.5-4.5..and if ur wantin a house for personal use make sure u have it inspected before hand..gl

did you not read the part about him not being able to qualify for that 3.5-4.5% mortgage rate since the loan amount is too low? how you trying to compare something to a product that is UNAVAILABLE?

What does stating a fact have to do with anything he qualifies for? Personal loans are too risky meaning OP should save for any house that low in price....OBVIOUSLY implying that we already know he cant get a mort under 50k-60k so that only leaves him with 1 option..evidently u didnt comprehend that part..sir

i honestly have no idea what you are trying to say here, sorry.

 

[jstunn197]

My advice to you is to continue to look around for different lenders because there are some will do a $25,000 mortgage... I know this because my bank will do it. We won't, however, do a mortgage for a foreclosed property or those in short sales. Keep looking around you'll find one.

 

[smokey13]

Have you contacted an agent? They can give you a better idea of what the house is really going for. Listen to crc. Pay off your debt and have an ER acct.

 

[airforce1king]

Op is trying to strike while the iron is hot am I right Op?

Guessing you're not wanting to wait another year to pull the trigger?

You are absolutely correct. Right now I need to move closer to my job. My 56 mile commute is wiping me out in gas.

My advice to you is to continue to look around for different lenders because there are some will do a $25,000 mortgage... I know this because my bank will do it. We won't, however, do a mortgage for a foreclosed property or those in short sales. Keep looking around you'll find one.

Who's your bank my man?

Have you contacted an agent? They can give you a better idea of what the house is really going for. Listen to crc. Pay off your debt and have an ER acct.

Nope. How/Where do I do that?

And to answer everyone's questions, my mom's co-worker just purchased a NON-fixer upper for $19,000. She closed the deal at the end of March and will be moving in at the end of this month. This 21 y/o kid I work with just missed work last night (we're on 3rd shift) because he's going to look at a house this morning that just went up for sale this week. It's priced at I think $35K. He said something about 6 acres (don't quote that) and something like 12 rooms total including 4 bedrooms. People couldn't pay their rent so they got booted. House is ready to move into now from what he says.

My step dad is a professional maintenance man and can fix anything so he can do ALL repairs if I need any.

To those asking about the houses, just look here. These are the suburbs of Cleveland aka the "good" areas. These are the area I'm trying to move into.

http://www.zillow.com/homes/for_sal...6,-81.528082,41.368757,-81.678286_rect/12_zm/

http://www.zillow.com/homes/for_sal...3,-81.523919,41.381027,-81.599021_rect/13_zm/

http://www.zillow.com/homes/for_sal...03,-81.530442,41.38502,-81.605544_rect/13_zm/

 

[airforce1king]

I was also advised by someone to take a $60K loan out and buy 2 houses and flip one. Sounds tempting but I just want to get my own first then think about the profit side of it later, ya know?

P.S. I appreciate all of the advice given so far.
 

 

[jkitty]

I need to move to a diff state, F Maryland. Tear down houses are 3-4 times more expensive that those in the links just posted.

Like everyone said, you should shop around for a different lender, and also try to get an agent. I don't think the buy 2, flip one, will work with a bank loan, someone can correct me if I'm mistaken. I'd say an agent in your area will have the best advice for you.

 

[airforce1king]

I need to move to a diff state, F Maryland. Tear down houses are 3-4 times more expensive that those in the links just posted.

Like everyone said, you should shop around for a different lender, and also try to get an agent. I don't think the buy 2, flip one, will work with a bank loan, someone can correct me if I'm mistaken. I'd say an agent in your area will have the best advice for you.

How do real estate agents work?

 

[kenn e]

i tried to get a mortgage for 80k on a 110k property they laughed at me. this is in socal. then i tried to get a personal loan, and i still got laughed at. these low properties on the cheap is for cash only investors only.

 

[jkitty]

How do real estate agents work?

They assist you with the whole transaction- looking for a house, finding appropriate lending options, getting inspections done, viewing the houses, putting in offers, etc. They are the intermediary for the whole process. Unless you are a very knowledgeable and or experiences homebuyer, I HIGHLY recommend getting an agent to help. And if your concern is that they cost money/ may not even help, leave that behind, it will be much easier to get this to actually happen with an agent.

 

[jkitty]

Like people are saying though, I don't know what options are available as far as mortgages for houses this cheap-- this is where an agent will be able to help though. They may be able to make your dreams come true, or give you a definitive no with one call.