how do i get cash back on a mortgage loan?

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im in the process of purchasing a house with no money down and i need to know if it is possible to get cash back when the house in bank owned.

My husband and I have always had perfect credit until a business failure 2 years ago. We had to file for bankruptcy (it was discharged 1 year ago). Does anyone have names of reputable lenders willing to do a small loan — maybe $ 2,500? We have been almost a month behind on our mortgage for a year now and I can’t seem to catch up. Also, part of the $ $ would be for a down payment on a car. We would try to refinance or get a home equity loan but due to the fact that it is a manufactured home (on 5 acres) lenders seem to turn up their noses on us — especially since our credit ratings have suffered due to the BK, etc. Any suggestions?? Thanks – linbad

  1. Reply
    January 20, 2011 at 11:03 am

    Not any more. Mortgage loans for more than the purchase price of the property are as scarce as feathers on a pig. You can look around, but my guess is that your search will be fruitless.

  2. Reply
    January 20, 2011 at 11:52 am

    There are some banks that will do rehab loans. I used to work as a loan officer, and that loan never went smoothly. There were always problems with the appraisals. You have to put together all your bids from contractors for work that will be done. They won’t give you money for you to do work, or for your own use if that is what you are looking for. Your best bet is to buy the house, and then after a few months take an equity loan if you are getting a good deal and want some cash. Good luck.

  3. Reply
    January 20, 2011 at 12:24 pm

    The idea behind “cash back” is that the property you’re buying is appraised at more than you’re paying for it. If a house is appraised at 100K and you pay 60K for it, many banks used to be willing to give you a mortgage for 80K (80% of the appraised value). Since you only had to pay 60K to the seller, the other 20K was yours to do with as you pleased. Many times people did this in order to make improvements on the house they were buying (new wiring or plumbing, siding, insulation, new kitchen, etc).
    Because of the recent problems with mortgages (foreclosures, delinquencies, etc) many banks will not loan more than the amount of the sale and may require a substantial down payment as well, because many homes are overpriced and the bank doesn’t want to wind up with a home worth less than what it is owed.
    There are many real estate “businesses” that make money in exactly this way, but as the value of houses falls and banks tighten their lending criteria, fewer and fewer people will be able to make a living by buying low and pocketing the difference between the sale price and the appraisal value.

  4. Reply
    January 20, 2011 at 12:57 pm

    go see Louie

  5. Reply
    James H
    January 20, 2011 at 1:15 pm

    There is some good info here.

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