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Borrowing more than list on an underpriced house that needs some work.

Situation: Looking to buy a home, and have saved a 10-20% for a downpayment. Recently, I found a home that normally might above my conservative price range, but has some defects that will need to be taken care of (the house is a REO). For example, if, comparable "trouble free" ready to move in homes in the same neighborhoobs are selling/listing for $700K, and the house I am looking for can be bought $500K-550K, and needs 25-50K of repairs to bring it up snuff can you "borrow up"to 600K so that you can fund the repairs. (for the purposes of this example, I didnt include my 50-75K downpayment). Hope this makes sense? Are there creative finance options available to do this or is the only option to have the cash in addition to the downpayment to make the repairs?Thanks! P.S. I have no debt, and 770+ credit. by michelle5go5 from Oklahoma City, Oklahoma. Mar 16th 2010 Reply


Richard Woodward (RichardWoodward)
#39 ranked lender in Texas - 106 contributions

There are renovation mortgages available to use for this purchase. I don't do mortgages is OK but I am sure you should be able to find someone that does them. If you can't, you can always get a home improvement second mortgage to fund repairs after closing if the home is in good enough condition to qualify for a traditional mortgage.

Jan 4th 2015
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