Author Topic: How to finance cheap house  (Read 2082 times)

meadow lark

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How to finance cheap house
« on: June 09, 2015, 09:08:50 PM »
Hi guys.  I am going to be looking at a house tomorrow for $37,500.  If I ended up going for it, any suggestions for how to finance? Could pay it within 3 years, I estimate.  Will need a remodel, but not sure how much yet.  My thoughts:
- Credit card cash advances?  (Typically 3% origination then no interest for a year.). Don't think I could get all on that, but at least $20,000.
- Personal bank loan?
- home equity loan on one of my other houses?
I can't take a loan out on my retirement account, because I already have a loan for a house remodel I did.
I will only actually do this if the numbers work out, including the interest, of course.  Just looking for money raising suggestions. 

iamlindoro

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Re: How to finance cheap house
« Reply #1 on: June 09, 2015, 09:16:59 PM »
Fannie Mae has no minimum loan amount, so you can find a lender who does a direct overlay on the Fannie Mae guidelines and finance this traditionally if you want.  I'm financing about $48K on a property and closing on that this week.  I've financed 45K on a 56K property before, too. 

I'd give you a reference for the lender I'm working with right now, but to be honest they have been frustrating to deal with and poor communicators.  Still, I know this particular lender has no minimum.  Check BiggerPockets, there are a number of guys who make this specific claim all the time.

My next-most-preferred option of the ones you listed would probably be a HELOC.

Mirwen

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Re: How to finance cheap house
« Reply #2 on: June 09, 2015, 09:17:59 PM »
I bought a house for $53k and 20% down and had no issue getting a conventional mortgage.  I think the origination fee was a little higher percentage, but that was understandable.  Have you tried to get a mortgage?

meadow lark

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Re: How to finance cheap house
« Reply #3 on: June 10, 2015, 12:08:06 AM »
Wow - thank you guys so much!  I just went on Lending Tree and Quicken Loans responded with an offer.  This would make it so much easier than what I was imagining.  I had read before they didn't offer loans below $50k, and my realtor told me I would have to find some way to pay cash.  So, thank you guys.  This is a better option.


Tanor85

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Re: How to finance cheap house
« Reply #4 on: June 10, 2015, 09:47:20 AM »
May I ask in what city this house is located? The price seems incredibly low to me.

Jack

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Re: How to finance cheap house
« Reply #5 on: June 10, 2015, 09:53:18 AM »
May I ask in what city this house is located? The price seems incredibly low to me.

In the US, pretty much anywhere other than coastal urban areas is going to have houses that cheap. You may have issues with crime or school quality in some cases (such as a $50K house in southwest Atlanta), but that price isn't all that uncommon.