In Desperate Need of Advice

[Pamela Crowley (Florida)]

All conditions must be disclosed to the lender that will be funding the loan. If they are not fully disclosed, then ALL that are aware of these conditions not being disclosed become parties to mortgage fraud.

Your best plan of action would be disclose everything about this property to a local bank or credit union. They will want more down payment or could hold back some of the funds for the repairs to be completed; even though this situation has become rare these past few years.

Bottom line is, you will need plenty of money as a down payment and the immediately available reserves to complete these repairs. If you don't have that and the seller won't wait for a FHA 203-K repair loan, then you will have to find some other property to purchase.

Please do keep in mind that anybody that wants to not disclose everything is someone you need to get away from immediately. I don't care if you find out while at the closing table that something was not done right, you will need to not sign and walk away or be prepared to be included in the legal criminal repercussions.

There are private lenders, called 'hard money lenders', that take deals like this. Their terms and conditions can be rough, but they are a LEGAL way to purchase this property while giving you the [short] time to make the needed repairs then apply for a more conventional refinance that would have better terms and conditions.

Good luck! Please do let us know what happens with this.

 

[toddmallard]

The appraiser is probably not an engineer. he will "should" ask for an engineers report on the possible hazards from the floor-ceiling holes. there may be more than the eye can see. I don't think the appraiser can determine the extent and say the home is not livable. I would not worry about it. Some lenders want it fixed before closing some will want the repair costs to be in excrow untill fixed. either way, good luck with your new home.

 

[missthang]

Thanks a great deal for your input. We are supposed to close by the 30th. So I will let you know how it goes from here.

Thanks

 

[Mztk1]

My husband and I are currently in the process of buying a REO home. The house has some minor things wrong such as: 2 small holes in floor, hole in ceiling, missing wall cabinets and only 2 light fixtures in the entire house. We have to go with a conventional mortgage and we have been told that when the appraiser comes out they may deem it non livable. Does anyone have any info about my situation? Thanks in advance!

Holes in the floor from what? Termites?

Hole in the ceiling, Is there a roof issue?

Missing wall cabients, In the kitchen? Are there no cabinets? Is there any storage space? Do the cabinets have to be installed to make the house typical for the market?

Do the missing light fixtures leave exposed wiring?

All items of deferred maintenance have to be disclosed in the report and the appraiser should provide an estimated cost to repair. Some lenders will not lend on a house with a cost above a certain amount. I know one that limits it to $2,000 and another is $4,000. Other direct lenders may lend on nearly anything. I just did one for a major, national lender that required about $35,000 in work. The house was not livable, which I clearly stated in the report, and they lent on it anyway.

Though your broker has put it in on the back of the appraiser as to whether the loan is workable, the fact is it is up to the lender and what type of loan programs they offer. The appraiser can only state what is there and then it is up to your broker to find a program that will accept it as is.

 

[CCAAMO]

How old is the home? If it is old enough to have lead based paint and there are holes in the ceiling and walls, any peeling paint become a health and safety hazard which would need to be repaired including the holes.

 

[missthang]

As far as the holes in the floor, one is the size of a vent and the other was from a fireplace being there, neither of the two are big at all. The hole in the ceiling was cut out, for what purpose I have no idea. There are still base cabinets in the kitchen just no over head cabinets. The light fixtures that are missing, you can see the wiring. I just don't understand how these few issues could be considered non livable, it's not like we wouldn't fix it before we moved in. My grandfather is a general contractor and has already looked at the house. There are no structural issues or major problems, just the few things I've said. I thought the appraiser is the one who just appraises the home and the building inspector was the one who would go in and determine whether or not it is livable, that's really the biggest question I have.

 

[CCAAMO]

The light fixtures that are missing, you can see the wiring. I just don't understand how these few issues could be considered non livable, it's not like we wouldn't fix it before we moved in.

Exposed wiring is a health and safety hazard, so is a hole in floor and ceiling as it allows easy access for rodents as well as other problems. Health and safety hazards must always be called out by the appraiser just as the appraiser must accurately document the condition of the home including deferred maintenance itemes.

I thought the appraiser is the one who just appraises the home and the building inspector was the one who would go in and determine whether or not it is livable, that's really the biggest question I have.

Now you know!:new_multi:

 

[panappr]

Definitely get a home inspector. However, I've purchased these properties in the past (as-is) and lenders have always made me keep an abeyance of 150% of the estimated repairs in an escrow account to close the loan. Maybe your situation is not that costly, but just something to keep in mind.

 

[BRCJR]

Is the mortgage going through FHA?

We have to go with a conventional mortgage....................................

 

[BRCJR]

If you are referring to FHA, it is Safe, Secure and Sound.

health and saftey of occupants (sanitary/safety)
structural soundness of improvements
items that may impair the customary use and enjoyment of the proerty