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Discussion Starter · #1 ·
So does anyone have any adivce.... I purchased my home on a 5 year arm roughly 3.5 or so years ago. Well I never intended to keep this house over 5 years hence the reason for the arm loan. Now its getting time to either refi into something, or sell and look at purchasing a foreclosure.

Im not totally happy with my house. The house really isnt set up for the type of stuff I do. The garage is attached, so anytime I do any auto painting etc it stinks up the entire home. Now thats not a big deal since im a bachelor, however its still not that great. Also since the garage is attached the driveway is right in front of the home. So my boat sets right in front of the garage which is another big pain. Ideally I need a home with a detached garage behind the house. I thought about building another garage behind my home and adding a driveway around the house. The problem with that is I dont have a huge back yard as it is. So im not sure how adding another garage would go over if I chose to resell later. Plus im not totally sold on having an attached and detached garage. Just seems like too much driveway.....

Now I cant say i hate my house. Its in a nice neighborhood which is a big plus. Its extremely close to work and no one bothers me.. I have redone alot of the interior so its great inside.....

So the decision is do I try to sell in a crappy market and look for a forclosure. If I do this I have to take the time to sell, find a place to live, then take the time to purcahse a piece of crap, take more time to fix it, then finally move in..... Probably at least a year process.

Or do I just refi the house, maybe build another garage and stop complaining...... not sure
 

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I would say to put the house on the market for a few months to see what excitement is there. If there is no luck in that you can refinance 30 days after taking the home off of the market. The forecasts are that mortgage rates will be at 7% or higher by the end of the year but I have heard that for the last 3 years. More and more of my clients are locking their mortgages to a fixed until the sales market rebounds.
 

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Discussion Starter · #3 ·
bnboatn said:
I would say to put the house on the market for a few months to see what excitement is there. If there is no luck in that you can refinance 30 days after taking the home off of the market. The forecasts are that mortgage rates will be at 7% or higher by the end of the year but I have heard that for the last 3 years. More and more of my clients are locking their mortgages to a fixed until the sales market rebounds.

yeah I think we are safe until the election.....
 

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Discussion Starter · #4 ·
bnboatn said:
I would say to put the house on the market for a few months to see what excitement is there. If there is no luck in that you can refinance 30 days after taking the home off of the market. The forecasts are that mortgage rates will be at 7% or higher by the end of the year but I have heard that for the last 3 years. More and more of my clients are locking their mortgages to a fixed until the sales market rebounds.

on another note...... do you know much about construction loans etc. I have also thought about building another garage, finishing off the garage I have into large reck room then rolling everything into a new 30 fixed.... Back when I did mortgages we didnt do any type of construction loans so im unfamiliar. We only did refi
 

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It sounds like amenities are more important to you than sales price right now. Only you know for sure. I'd suggest NOT putting your house on the market yet because you don't have a target house in sight.

Maybe you should start looking around to find a new house before listing your old one.
 

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Discussion Starter · #6 ·
djm said:
It sounds like amenities are more important to you than sales price right now. Only you know for sure. I'd suggest NOT putting your house on the market yet because you don't have a target house in sight.

Maybe you should start looking around to find a new house before listing your old one.

well your right its kind of a catch 22. If I find a house I like I cant purchase because I dont have my house sold. If I sell my house and start looking I dont have a place to live....


I thought about trying to find a place and writing up the contract to give me so long to sell my home. However with the market being so slow im not sure if it would really work out. I kinda feel like I would just be spinning my wheels.
 

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YOu can do both you know?? Get rid of that ARM and still look for other houses... I guess you would loose the closing costs but still need to protect agaist the ARM increase. OR maybe it won't increast as much as you think? Let us know. I have about 3 more years before my 8 year ARM can adjust... so I am curious as well.
 

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Discussion Starter · #8 ·
Rock Steady said:
YOu can do both you know?? Get rid of that ARM and still look for other houses... I guess you would loose the closing costs but still need to protect agaist the ARM increase. OR maybe it won't increast as much as you think? Let us know. I have about 3 more years before my 8 year ARM can adjust... so I am curious as well.
Well I cant say from personal experience but I have a friend with an arm that began to adjust a while back. I know at one point it took a good jump up. I dont know what it has done lately.

Here is the kicker. He had good credit so he thought a refi was in order. Well what he didnt know was his wife had mysteriously forgotten to send in car and house payments on time. Now his and her credit is crap.

I advised him to burry her under the tree out back....
 

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axkiker said:
well your right its kind of a catch 22. If I find a house I like I cant purchase because I dont have my house sold. If I sell my house and start looking I dont have a place to live....

You certainly don't want what's behind door #2!


I thought about trying to find a place and writing up the contract to give me so long to sell my home. However with the market being so slow im not sure if it would really work out. I kinda feel like I would just be spinning my wheels.
If you find a house you want to buy add a clause to the purchase contract saying the purchase of the new house is contingent on the sale of the old house- no dates just the sale. This happens all the time. It's totally legal and up front. Most realtors don't understand that a contract is simply a meeting of the minds and has nothing to do with rules so don't take no for an answer.

In a market like this there will be sellers who will accept this this contingency because it's the only offer they may be getting. Then you can sell your house for whatever your market will bear, rent it out (will rent cover your payment?), or sell it with owner financing (this will attract a ton of buyers). While your doing all this the new house is tied up in escrow and waiting for you.
 

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axkiker said:
on another note...... do you know much about construction loans etc. I have also thought about building another garage, finishing off the garage I have into large reck room then rolling everything into a new 30 fixed.... Back when I did mortgages we didnt do any type of construction loans so im unfamiliar. We only did refi
I'm no banker, but I never heard of anyone getting a construction loan for improvements, I believe that you could only get that kind of loan if you were building a new house. So you could just refinance for a larger amount, or take out a home equity loan for your home improvements.
 

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Discussion Starter · #11 ·
Fyhr Factor said:
I'm no banker, but I never heard of anyone getting a construction loan for improvements, I believe that you could only get that kind of loan if you were building a new house. So you could just refinance for a larger amount, or take out a home equity loan for your home improvements.

I could be totally off my rocker but I thought you could get a "construction" loan if you were doing something such as an addition etc. they would request an appraisal based on the addition being added and loan $$ based upon that. Then once it was completed you would roll it all into 1 loan.

That could be totally wrong though....
 

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Discussion Starter · #12 ·
djm said:
If you find a house you want to buy add a clause to the purchase contract saying the purchase of the new house is contingent on the sale of the old house- no dates just the sale. This happens all the time. It's totally legal and up front. Most realtors don't understand that a contract is simply a meeting of the minds and has nothing to do with rules so don't take no for an answer.

In a market like this there will be sellers who will accept this this contingency because it's the only offer they may be getting. Then you can sell your house for whatever your market will bear, rent it out (will rent cover your payment?), or sell it with owner financing (this will attract a ton of buyers). While your doing all this the new house is tied up in escrow and waiting for you.

that is some great info...... Can you explain a little about owner financing. Im very unfamiliar with that...
 

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axkiker said:
I could be totally off my rocker but I thought you could get a "construction" loan if you were doing something such as an addition etc. they would request an appraisal based on the addition being added and loan $$ based upon that. Then once it was completed you would roll it all into 1 loan.

That could be totally wrong though....
It could be, I just don't know of anyone that had ever taken out that kind of loan for improvements, maybe there's a down side to it, I just don't know, I would just talk to a bank and find out what your options are from them.
 

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You can get a construction loan to add the garage. The proper term would be a rehab loan. This will cancel out your current first mortgage and give you the funds available to add the garage. With canceling the first mortgage you can take a fixed rate mortgage. At times this will be done through a draw schedule with the building of the garage. You can also take out a home equity loan but this will leave you in the same postion with the ARM. I did read the situation of your friends and their ARM's hurting and you will take care of both at one time. I can answer any question that you may have in the mortage business. If you wish you can contact me at 239-398-0921.
 

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Discussion Starter · #15 ·
bnboatn said:
You can get a construction loan to add the garage. The proper term would be a rehab loan. This will cancel out your current first mortgage and give you the funds available to add the garage. With canceling the first mortgage you can take a fixed rate mortgage. At times this will be done through a draw schedule with the building of the garage. You can also take out a home equity loan but this will leave you in the same postion with the ARM. I did read the situation of your friends and their ARM's hurting and you will take care of both at one time. I can answer any question that you may have in the mortage business. If you wish you can contact me at 239-398-0921.

hey thanks for the info.... I may give you a call soon...... Let me figure out what direction I think would be best to head in. I need to speak with you about financing and an appraiser to get an idea if it would even be a good idea to add onto my home or search out another...

thanks
 

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I do not know what you financial position is but you can check with your current lender about what homes they currently own and possible get a great deal. Take caution with doing such as you may end up with two homes for a long time with the state of the current market (like down here is southwest Florida). Let me know if I can help when you have more questions.
 

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axkiker said:
I could be totally off my rocker but I thought you could get a "construction" loan if you were doing something such as an addition etc. they would request an appraisal based on the addition being added and loan $$ based upon that. Then once it was completed you would roll it all into 1 loan.

That could be totally wrong though....

You sure can get a construction loan for remod's and additions..

Before
 

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all on a construction loan when we were 6 months out to finish we locked into our loan and the way we did it we can float down if the rates are lower than where we locked. I think it was 6.25% lock but my wife did all of that part.

after
 

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axkiker said:
that is some great info...... Can you explain a little about owner financing. Im very unfamiliar with that...
There are a lot of advantages to holding a mortgage when selling your house. You get a FULL RETAIL price, you can sell to a larger pool of buyers who normally could not obtain a mortgage, closing costs are minimal, you can close fast, and IF your payments are lower than what you charge a new buyer then you make money each month.

So if you own a house worth 300k but you bought it years ago and only owe 150k then you may pay 1000/month (depending on taxes, insurance). Think of a new buyer at 300k he'd pay 2000 per month plus taxes if he went to a bank. Well, you become the bank and charge him 2k a month. You pocket 1k each month and the buyer doesn't need to qualify for a loan.

Depending on the numbers you can do tons of other things too. I'm no expert but that's the basics.
 

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Discussion Starter · #20 ·
djm said:
There are a lot of advantages to holding a mortgage when selling your house. You get a FULL RETAIL price, you can sell to a larger pool of buyers who normally could not obtain a mortgage, closing costs are minimal, you can close fast, and IF your payments are lower than what you charge a new buyer then you make money each month.

So if you own a house worth 300k but you bought it years ago and only owe 150k then you may pay 1000/month (depending on taxes, insurance). Think of a new buyer at 300k he'd pay 2000 per month plus taxes if he went to a bank. Well, you become the bank and charge him 2k a month. You pocket 1k each month and the buyer doesn't need to qualify for a loan.

Depending on the numbers you can do tons of other things too. I'm no expert but that's the basics.

well what i dont understand is whats the difference in this and renting. I assume if I have a lien on my home that before I could let someone else take it they would have to be approved by my bank. Or is this a situation where they are added to the title and they make payments to my bank but in the end im still responsible if they up and leave.

Either im missing something here or it seems like things could backfire if you got a dead beat purchaser. I sure could not afford to be in a situation where I was stuck with 2 mortgage payments.
 
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