Jennifer asked:


If I recall correctly, a bank will only issue a loan for as much as a home is worth.

There’s a foreclosure in our neighborhood that no one touched while the seller had it on the market… honestly, it’s ugly - aluminum siding, brick veneer, and the layout of the house is odd, but we’ve decided we can make it work.

Anyway, since it didn’t sell, that owner had it seized by the bank. My husband and I want to make a low offer on it, and maybe get financed for an extra $20k in home improvements (even this would still put our loan quite a bit lower than the home’s appraisal value). Do banks do this? We’re qualified for FHA financing, but we can also put 10% down alternatively.

MARCOS

jolifrijoles asked:


I am so irritated with the catch-22 of home improvement. You can’t get a loan without having equity (i just bought 4 months ago), and in this market you sure aren’t going to get equity without boosting the value of your home by making improvements, which of course requires money.I was prequalified for 3 times the mortgage I got, but this place needs a LOT of work. I was naive in thinking that since i prequalified for so much more that I could easily find home improvement funds. To an extent, that’s true– I can get personal loans with decent interest, but they’re on a 5-7 year payoff. I’d prefer to roll it all into a 30 yr mortgage so I’m not too burdened with the payment. I also don’t like the 203 loans because they require you to use licensed contractors for everything. A lot of it I could do myself. I’m guessing I could do it all with about $20-30K if I do what i can myself. If I go the contractor route it’s probably about 50K. I don’t want to put this all on credit cards. Are there any options other than 5 yr loans and credit cards, or 203 loans to get the money to do this stuff and pay it off in 15 years or more??? I’m about to give up. Thanks

BARNEY