Mortgage Help Please!!!!?

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Hello!

I’m in Ohio (Summit County) and have came into a large settlement, I am 23 years old and quite frankly have no experience in loans, lines of credit, I’ve pretty much paid cash for everything I’ve ever owned other than some minor retail credit cards and the occasional payment plan for jewelry, etc.

I am buying a house, car, and a few new household appliances and whatnot. We’re looking at a simple conservative house around the 170K area. This is the root of my whole question; Can you borrow more than the value of the home? I know this might seem like a simple question but with all the issues with sub-prime lending and other dumb republican-democratic economy screwiness..

I’m looking to borrow an amount at or around 30K~ over whatever the house will end up costing us final cost, done deal, out the door..

I’ve read that houses can easily be used as collateral for a secured loan, I just didn’t know how flexible companies were in regards to “writing over”. I mean it’s like righting a check to a grocery store, getting it approved for $ 20 over, except it’s like $ 20,000 or $ 30,000!! I’ll be able to pay whatever the monthly payment is, of course I am being fairly frugal but nothing too lavish, doesn’t take much to make me happy. I’d feel better living in a beautiful new house in the country and donating thousands to charities rather than doing the typical “I just got rich” thing and ruining their financial future and security with 1 or 2 moronic purchases. I am only borrowing 30K over the top, so I will spend less than =>170K on the house and need at least 30K extra.

If anyone has a clue on how these things work I would appreciate it very much because I’m sure I would get taken for a lot of cash if I just went out to a bank ignorantly and got a loan because their sign was nicer.. Oh too, should I “lie” to the bank about how much money I have? Anytime I’ve bought a car I just started out with the base cost of the vehicle, and say that’s all I have. If they take a 2K hit, it really costs them nothing with a return customer and referrals they actually owe that to the consumer if it were a perfect world…:(

I hope I didn’t confuse anyone with this, I am getting evicted from my apartment (good timing right????), was in a really terrible rut financially due to losing my job. I have the check and the monthly annuity check (partial lump sum then monthly payments for 20 years).

I am just wondering because I found out today, it’s a Saturday and I’d like to be as ready as an accountant so I can make this happen yesterday! 🙂

Thanks guys,

Rick

5 Comments
  1. Reply
    My Take on It
    February 3, 2011 at 11:18 pm

    No, you cannot get more than the house is selling for. The days of them writing the loan for 125 % are gone.
    No, you cannot *lie* to the bank and hide assets when you are trying to get a loan. Also, since you just came into this money, you might not be able to use it since it needs to be seasoned. That means it might need to sit in a bank account for a few months to prove that it isn’t a loan from someone. The lender will want full disclosure when it comes to your finances. Lie or omit, and you risk being declined or even in trouble for mortgage fraud.

    What you should do if you have enough cash is just buy a house outright and bypass the mortgage. Especially since you do not have a job right now.

    Now, there is one type of loan that can be written to be more than the house is selling for. It is called a 203k loan. Ask the lender about it. It is for houses that need extensive renovation to be lived in.

  2. Reply
    coolbreeze
    February 3, 2011 at 11:21 pm

    First of all you can’t borrow more than the purchase price. On an FHA loan the maximum you can borrow is 96.5% and on conventional 95%. If you’re getting evicted from your apartment you won’t be able to buy a house. Plus, you need good credit to qualify for the loan. Lying to the bank doesn’t work because they verify everything.

  3. Reply
    reenzz
    February 4, 2011 at 12:02 am

    1. The bank will never loan you more that 80% of what the property is worth.

    2. The bank will also verify all of your assets, income, credit, debts and employment.

    3. Having an eviction on your record will make it nearly impossible to get a lender to approve you.

  4. Reply
    Gary H
    February 4, 2011 at 12:32 am

    Rick – Like Mrs Anna above –

    I want to add my $ 00.02

    Stay away for those hard money Lenders, you will spend way more ten what you are looking to borrow. Yahoo answers is a good place to ask something, you can easily fall victim to spammers.

    Questions you need to asking yourself – what you do today, will make how you are tomorrow.

    Think about your credit – see link http://www.debt-consolidation-credit-repair-service.com/forums/index.php?s=edb62c540133af01a3b5992827ca09f3

    All of good people in the forums, if they are caught soliciting, they get booted out.

  5. Reply
    dawn_19026
    February 4, 2011 at 12:42 am

    Your question is a little hard to follow. You can not borrow over the home’s value. When people use a home as collateral it is because they have equity, i.e. the home is worth more than they owe on it.

    Everyone is correct in their assuptions about being approved with an eviction. I am just unclear as to why you would need to borrow for more of the home’s value. I also noticed that you mention a settlement check and annuity payments for 20 years. I assume this settlement was part of a lawsuit so I think it would be pretty easy to explain to the bank where the money came from. But the annuity can’t be used as collateral for obtaining a loan. If you are trying to pay down your existing debt you could do the following:

    1. Hold off on buying the house and use some money to get a new apartment or pay the back rent to avoid eviction.

    2. Use part of the lump sum to pay off the debt.

    3. If you’re debt is higher than the lump sum you could sell some of your future payments to pay off the debt since the amount that you would be being in credit card interest would be significantly more than the amount you will take as a discount on the future value of the annuity payments.

    4. Once you are debt free, try building up your credit and then try purchasing a house. You could sell some of your future payments for the down payment. This is provided that you don’t need the annuity isn’t your entire source of income to pay for the mortgage.

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