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Financing an as-is home

Recently my husband and I have fallen in love with a 1700's farmhouse in need of serious repair. The home needs to be torn down to the shell and given lots of TLC but we believe it is worth it all. Plus the view of the land (just over 14acres) in a desirable neighborhood is worth any and all effort we put into the home.The home with property, one car garage, a shed, and barn is going for ridiculously cheap in our dream neighborhood. The only problem is we are having trouble getting financing for an "as-is" home in the state of Maine due to the house not being livable in its current condition. Eventually we want to make the house our home but it will take time, love and patience. How can we make our dream of homeownership with this farmhouse a reality? Any good resources we can use or read to better educate ourselves on as-is home buying would be fantastic!! As a side note this will be our first home purchase and with any luck only home purchase :)
Thank you so much!!

Re: Financing an as-is home

Find out what you need to do to make it meet the bare minimum for "livable" whatever that means. Ask if you do that to the house, or a section of the property can you get the loan. This type of project normally requires a HUGE pile of cash. That's why the place is so cheap.

Re: Financing an as-is home

Work out what you think it will cost to make your repairs. Take that number to the bank and explain to them what your plans are. They may give you a loan to buy and redo the property. What they can do is give you enough to buy it and the balance to be paid as the work progress. They used to call it a construction loan.


Re: Financing an as-is home

You need to talk to a mortgage broker, who might be able to find a bank or an institution to finance you. A construction loan, as john said, is a good way to start.

Since you plan to reduce the structure to the framing, this will be considered a remodel. Adding the fact that this is your first home, they might give you a construction progressive loan, meaning, fund one step at a time, after their inspector verifies that the work done passed building inspection.

After all work is complete and you are granted a certificate of occupancy by the building department, you will be able to obtain a regular mortgage to substitue and to pay off the construction progressive loan plus interest.

Just keep in mind that once you start, you have to keep up the pace and not sit around dillydallying. This means, have your subs lined up (contracts and all) and have your materials available on your lot. The bank's inspector will want to see that. If you plan on doing some of the work yourself, be ready for even closer and tighter inspections. Just follow your approved plans and building codes to the last nail and you'll be fine.

Re: Financing an as-is home

And another thing: any loan you choose - you will have to qualify for and as you know, banks are more strict now than before.

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