gemini5362
Veteran Member
What the bank is talking about doing sounds like your best option. Hopefully they can make that work out.
Land we rent sold
- Thread starter AlanB
- Start date
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rox
Veteran Member
Alan,
I think you are rather hard on the other bank who didn't return your calls today, it is Saturday! Really dont' put all your eggs in one basket, call Monday and talk to someone with at least 5 years mortgage lending at the other bank.
Another thing do NOT ket them take a blanket mortgage, don't go there. They can lend you money and put a mortgage on your existing home. They can lend you mony on vacant land of the home you are buying. They can lend you money on the new home and smaller parcel of land you are buying. What yo do NOT wnat is a blanket mortgage that tangles up the properties onto one mortgagge. A Blanket mortgage is two or more properties on one mortgage. You do not want that. Only one property per mortgagge. They will try to "cross collateralize" don't take that bait. When you cross collateralize, and definatley use that term with them, they will know what it means, you basically grab as many diverse assets as you can to more, much more, than cover the loan. You can say for example, "I dont' want any cross collatiralization, or blanket mortgages." I am looking for one mortgage per parcel" What they will do is they will put the entire $125,000 against your existing home, in a blanket mortgage. Try and get them to put the minimum against your existing home and the maximum against the new property. They dont' want this of course, they want to grab more equity in your home, (say you have $50,00 equity in your home they put a blanket $125,000 mortgage against it). Yu can't sell your current hme until you pay off the $125,000 mortgage. Have them put like a $10,000 or $20,000 mortgage (the lowest possible) against your home and the rest on the new property.
Basically think of it this way. The property appraised at $143,000 you put say $10,000 down payment on a sale of They are lending $110,00 against a property of $143,000 which is an 83% laon. Really try and make it 20% as then you should get a better rate. In other words they are financing 80% of $143,000 (the appraised value) or $114,400. Always think in their terms, the value is $143,000 not what you are paying for it, $120,000.
You really really owe it to yourself to go to the secosn banks and say, I want an 80% loan on a property appraised at $143,000. Not all of the $143,000 will meet the residensial ratio as most of the value is int he land. And then stop talking!!!!!! Show the apprasisal and then wait. Listen. Don't offer up a mortgage on your current home or anything. Actually I do not think you should even give a mortgage on your current home at all. This deal becasue of the high appraisal should be made entirely on that piece of property and not involve your current home. The only viable back up plan is if it does involve your current home it is on a seperate note and mortgage for a very small amount and make them show you the numbers why they even need it at all. Honestly the bank you are dealing with is all about over securing their loan which technically is illegel. In other words they want $200,00 in Security (collateral) equity in your home + the property you are buying for a $110,000 loan. If you have the dwon payment they should not even need your current home. If you feel that the onlyw ay to get this is to offer up your current home, then it is a seperate laon a seperate note and a much much much smaller mortage. The vast majority fo tany new mortages should go on the new property. I hate to say this, but I really do think based onw hat you are telling me, but this first bank you are with is to greedy. You owe it to yurself to try others. And the suggestion about a mortgage broker is an excellent suggestion, a really good suggestion, you should try them, and did you even find 10 minutes to call GE yet? Give people a break, you were calling on a saturday. On a Saturday you are not going to get anybody with any senority/experience. Please do try again on Monday, at least look at other deals/options. Don't forget to get the original appraisal from your current bank so that you ahve it in hand.
I am really proud of you that you ahve not given up, but i think you are foolish to jsut wait until the bitter end with this current bank, the longer it takes the more they are going to "over secure" their loan and the tendency is to cave in, because you want the property. The abnk wins and you loose. The ony way to avoid that is to have options, don't put all your eggs in one basket and that takes work and effort on your part.
I think you are rather hard on the other bank who didn't return your calls today, it is Saturday! Really dont' put all your eggs in one basket, call Monday and talk to someone with at least 5 years mortgage lending at the other bank.
Another thing do NOT ket them take a blanket mortgage, don't go there. They can lend you money and put a mortgage on your existing home. They can lend you mony on vacant land of the home you are buying. They can lend you money on the new home and smaller parcel of land you are buying. What yo do NOT wnat is a blanket mortgage that tangles up the properties onto one mortgagge. A Blanket mortgage is two or more properties on one mortgage. You do not want that. Only one property per mortgagge. They will try to "cross collateralize" don't take that bait. When you cross collateralize, and definatley use that term with them, they will know what it means, you basically grab as many diverse assets as you can to more, much more, than cover the loan. You can say for example, "I dont' want any cross collatiralization, or blanket mortgages." I am looking for one mortgage per parcel" What they will do is they will put the entire $125,000 against your existing home, in a blanket mortgage. Try and get them to put the minimum against your existing home and the maximum against the new property. They dont' want this of course, they want to grab more equity in your home, (say you have $50,00 equity in your home they put a blanket $125,000 mortgage against it). Yu can't sell your current hme until you pay off the $125,000 mortgage. Have them put like a $10,000 or $20,000 mortgage (the lowest possible) against your home and the rest on the new property.
Basically think of it this way. The property appraised at $143,000 you put say $10,000 down payment on a sale of They are lending $110,00 against a property of $143,000 which is an 83% laon. Really try and make it 20% as then you should get a better rate. In other words they are financing 80% of $143,000 (the appraised value) or $114,400. Always think in their terms, the value is $143,000 not what you are paying for it, $120,000.
You really really owe it to yourself to go to the secosn banks and say, I want an 80% loan on a property appraised at $143,000. Not all of the $143,000 will meet the residensial ratio as most of the value is int he land. And then stop talking!!!!!! Show the apprasisal and then wait. Listen. Don't offer up a mortgage on your current home or anything. Actually I do not think you should even give a mortgage on your current home at all. This deal becasue of the high appraisal should be made entirely on that piece of property and not involve your current home. The only viable back up plan is if it does involve your current home it is on a seperate note and mortgage for a very small amount and make them show you the numbers why they even need it at all. Honestly the bank you are dealing with is all about over securing their loan which technically is illegel. In other words they want $200,00 in Security (collateral) equity in your home + the property you are buying for a $110,000 loan. If you have the dwon payment they should not even need your current home. If you feel that the onlyw ay to get this is to offer up your current home, then it is a seperate laon a seperate note and a much much much smaller mortage. The vast majority fo tany new mortages should go on the new property. I hate to say this, but I really do think based onw hat you are telling me, but this first bank you are with is to greedy. You owe it to yurself to try others. And the suggestion about a mortgage broker is an excellent suggestion, a really good suggestion, you should try them, and did you even find 10 minutes to call GE yet? Give people a break, you were calling on a saturday. On a Saturday you are not going to get anybody with any senority/experience. Please do try again on Monday, at least look at other deals/options. Don't forget to get the original appraisal from your current bank so that you ahve it in hand.
I am really proud of you that you ahve not given up, but i think you are foolish to jsut wait until the bitter end with this current bank, the longer it takes the more they are going to "over secure" their loan and the tendency is to cave in, because you want the property. The abnk wins and you loose. The ony way to avoid that is to have options, don't put all your eggs in one basket and that takes work and effort on your part.
OP
AlanB
Elite Member
Rox, I was calling on Friday.
I have a good freind of mine, who does a lot of business with that bank, (the one that did not return my call) I spoke with him today about options and he is calling his banker for me Monday, and having the banker call me. And just for reference he is also my TRACTOR dealer
Have not spoken with GE credit yet, I generally would rather do this with people that I can sit down face to face with. I just tried to do it today, but they are closed for the rest of the weekend. Will have to speak with them Monday. Only other thing I have to be a little careful about is I do not want the whole world running my credit at the same time.
I have another friend, who's daughter is a mortgage broker, and she is supposed to call me today or tommorrow.
What will go against my current house, would be a bridge loan, to give me the cash to make 20% down payment (S) so that the other loans come in without extra insurances or fees.
Also thought about talking with one of the local mortgage brokers here, and basicly as you said, handing them the appraisal, and asking what they can do for me.
The bank sent me the original Appraisal and I got it today.
I have a good freind of mine, who does a lot of business with that bank, (the one that did not return my call) I spoke with him today about options and he is calling his banker for me Monday, and having the banker call me. And just for reference he is also my TRACTOR dealer
Have not spoken with GE credit yet, I generally would rather do this with people that I can sit down face to face with. I just tried to do it today, but they are closed for the rest of the weekend. Will have to speak with them Monday. Only other thing I have to be a little careful about is I do not want the whole world running my credit at the same time.
I have another friend, who's daughter is a mortgage broker, and she is supposed to call me today or tommorrow.
What will go against my current house, would be a bridge loan, to give me the cash to make 20% down payment (S) so that the other loans come in without extra insurances or fees.
Also thought about talking with one of the local mortgage brokers here, and basicly as you said, handing them the appraisal, and asking what they can do for me.
The bank sent me the original Appraisal and I got it today.
Last edited:
CurlyDave
Elite Member
Alan:
You might want to take a look at these guys:
e-constructionloans.com - Construction loans in California
Even though they mostly finance construction loans, I have used them for regular house purchase loans three or four times over the past few years. Their service has always been good, and their rates are among the lowest I have seen.
They have lot loans at reasonable rates also. Since the value of the land is high compared to the house value in your case, they may be able to help.
I know they are internet and you prefer face to face, but if they operate in your state, and push comes to shove on this deal, they are a good choice.
You might want to take a look at these guys:
e-constructionloans.com - Construction loans in California
Even though they mostly finance construction loans, I have used them for regular house purchase loans three or four times over the past few years. Their service has always been good, and their rates are among the lowest I have seen.
They have lot loans at reasonable rates also. Since the value of the land is high compared to the house value in your case, they may be able to help.
I know they are internet and you prefer face to face, but if they operate in your state, and push comes to shove on this deal, they are a good choice.
OP
AlanB
Elite Member
Dave, I will have to check with them on Monday, but their website left me feeling like they were CA only.
As I have been playing on the net, and trying to figure out the Gross adjustments etc. and what the bank was trying to explain too me, it keeps coming back to where it looks like the industry standard is net15% / gross25% max.
My three comps are 13/73, 23/26 and 15/60 To get that 23/26 which is the closest, (and still out of tolerance) she had to go back to 2005, which in itself pulls in more questions. The appraiser spelled out why in the report quite well, and I can understand exactly where she is coming from as I read it a couple of times. I can also see the banks side and the secondary mortgage side as well. The bank to write it as a home loan wants to be able to just immediately turn it too the secondary market, and it has to fit their parameters, Secondary market has set their parameters to minimize risk, they are kind of buying and servicing in mass, with a narrow margin on each, and what does not fit their parameters they just won't fool with.
Somehow this reminds me of the Wal-mart vs. Ace Hardware discussion. I need one of those circuit breakers for the worthington box I have in this house, I can go to Wal-mart, but all they are going to have or deal in is the common GE breaker, I have to go to the hometown old timey specialty hardware store,,, OH, and pay the price.
I guess I see where the problem is. Just don't like it.
Need to talk with an appraiser to see how to make it comp out better, but as the banker said, if there are no comps, then there just aren't any, and they cannot make it up. At that point I drop out of the neat box that makes a saleable mortgage.... Maybe it is moot, but if I have to buy it on the higher interest rate "commercial" type loan, I will want to improve it and get it to comp, then Refi at a better rate ASAP.... I think I am dealing with more unkowns then knowns, but I think a good place to ask that question will be the lady that did the report, and ask her what would make it better or easier to comp.
Well, at least this stuff is educational for me
As I have been playing on the net, and trying to figure out the Gross adjustments etc. and what the bank was trying to explain too me, it keeps coming back to where it looks like the industry standard is net15% / gross25% max.
My three comps are 13/73, 23/26 and 15/60 To get that 23/26 which is the closest, (and still out of tolerance) she had to go back to 2005, which in itself pulls in more questions. The appraiser spelled out why in the report quite well, and I can understand exactly where she is coming from as I read it a couple of times. I can also see the banks side and the secondary mortgage side as well. The bank to write it as a home loan wants to be able to just immediately turn it too the secondary market, and it has to fit their parameters, Secondary market has set their parameters to minimize risk, they are kind of buying and servicing in mass, with a narrow margin on each, and what does not fit their parameters they just won't fool with.
Somehow this reminds me of the Wal-mart vs. Ace Hardware discussion. I need one of those circuit breakers for the worthington box I have in this house, I can go to Wal-mart, but all they are going to have or deal in is the common GE breaker, I have to go to the hometown old timey specialty hardware store,,, OH, and pay the price.
I guess I see where the problem is. Just don't like it.
Need to talk with an appraiser to see how to make it comp out better, but as the banker said, if there are no comps, then there just aren't any, and they cannot make it up. At that point I drop out of the neat box that makes a saleable mortgage....
Maybe it is moot, but if I have to buy it on the higher interest rate "commercial" type loan, I will want to improve it and get it to comp, then Refi at a better rate ASAP.... I think I am dealing with more unkowns then knowns, but I think a good place to ask that question will be the lady that did the report, and ask her what would make it better or easier to comp.Well, at least this stuff is educational for me
rox
Veteran Member
Alan,
So glad you wrote and let us knwo that you are not jsut considering the one bank, that you are investigating and contacting other financing options. Does the bridge loan involve one mortage on both properties? If yes, then simply ask for a seperate loan against your house to make your 20% down on the new purchase. Actually if you had a home equity line of credit you would not even need a bridge loan. I am unclear on what the term "bridge loan" really means. What are the terms and conditions of a bridge loan? As t has been described to you what is it? My understanding of a bridge loan is when you are buying a new property and have not sold the current property. The bank puts a mortgage on both properties, however once you sell the current home and the bank is paid XXX proceeds they remove their lein. I must be missing something here. Are you selling your current home? I quite possibly have gotten off track, I thought oyu were keeping your current home and were not going to live in this one, but fix it up and flip it, keeping some land. Again this is probably a misunderstanding on my part, sorry. So if you plan on selling your current home, yes a Bridge loan is fine. if what they mean as a bridge loan is that you keep both properties and they have one loan and a lien against both properties that is not at all in your best interest. S I guess I should try to understand your transaction better before inserting foot in mouth
So glad you wrote and let us knwo that you are not jsut considering the one bank, that you are investigating and contacting other financing options. Does the bridge loan involve one mortage on both properties? If yes, then simply ask for a seperate loan against your house to make your 20% down on the new purchase. Actually if you had a home equity line of credit you would not even need a bridge loan. I am unclear on what the term "bridge loan" really means. What are the terms and conditions of a bridge loan? As t has been described to you what is it? My understanding of a bridge loan is when you are buying a new property and have not sold the current property. The bank puts a mortgage on both properties, however once you sell the current home and the bank is paid XXX proceeds they remove their lein. I must be missing something here. Are you selling your current home? I quite possibly have gotten off track, I thought oyu were keeping your current home and were not going to live in this one, but fix it up and flip it, keeping some land. Again this is probably a misunderstanding on my part, sorry. So if you plan on selling your current home, yes a Bridge loan is fine. if what they mean as a bridge loan is that you keep both properties and they have one loan and a lien against both properties that is not at all in your best interest. S I guess I should try to understand your transaction better before inserting foot in mouth
OP
AlanB
Elite Member
The confusion may be in my terms. The bridge loan came about when I was borrowing money against my current home to cover the down payment on a new home. Depending on how everything finances out, we may or may not need it.
What we are doing at the moment is buying the JH property. This is the 9.5 acres with the older house that needs to be re-habbed. If we can swing getting that, we will move our equipment from the property we have been renting for our equipment to there (saving $200 a month) and then begin work rehabbing that house to make it liveable.
The thought is in one month, I can have that house. JH, in a liveable condition. We would then move to the JH property from the Kelsey (current) house. That would leave Kelsey empty. I would like to think that in an additional month, we could "flip" clean up whatever Kelsey, then put it on the market for sale.
We would then pay off whatever home expenses we could, or the land loan or use the delta of money to build on too the JH property. Things are changing so quick on how it is being financed, I am not positive that I have it correct.
The end of the scheme though is to have us living at the JH property, with all the equipment there at the house as well. Long term plans include a large shop for me, and a very much larger home for the DW.
It was hit home for me again today, why I want that, as I took the blown Hydraulic lines off the Bobcat, it involved 3 trips between the property and the house were the bulk of the tools are located. It would be sooooo nice if everything was together. Not to mention that way the wife can just tell me what equipment she is in need of the next day and I can make my KIDS stage it and prepare it for her
Oh, and the home equity line of credit and the bridge loan as I see the difference are the interest and the payback. The home equity the payments are amortized out to repay the loan (and I would get a better rate) while the Bridge (and I may be using the wrong term) is a slightly higer rate on an interest only loan to get me through this window of swapping around houses etc. and better get paid off fairly rickety tick. I think the bridge had a one year term with 6 month option on it.
What we are doing at the moment is buying the JH property. This is the 9.5 acres with the older house that needs to be re-habbed. If we can swing getting that, we will move our equipment from the property we have been renting for our equipment to there (saving $200 a month) and then begin work rehabbing that house to make it liveable.
The thought is in one month, I can have that house. JH, in a liveable condition. We would then move to the JH property from the Kelsey (current) house. That would leave Kelsey empty. I would like to think that in an additional month, we could "flip" clean up whatever Kelsey, then put it on the market for sale.
We would then pay off whatever home expenses we could, or the land loan or use the delta of money to build on too the JH property. Things are changing so quick on how it is being financed, I am not positive that I have it correct.
The end of the scheme though is to have us living at the JH property, with all the equipment there at the house as well. Long term plans include a large shop for me, and a very much larger home for the DW.
It was hit home for me again today, why I want that, as I took the blown Hydraulic lines off the Bobcat, it involved 3 trips between the property and the house were the bulk of the tools are located. It would be sooooo nice if everything was together. Not to mention that way the wife can just tell me what equipment she is in need of the next day and I can make my KIDS stage it and prepare it for her
Oh, and the home equity line of credit and the bridge loan as I see the difference are the interest and the payback. The home equity the payments are amortized out to repay the loan (and I would get a better rate) while the Bridge (and I may be using the wrong term) is a slightly higer rate on an interest only loan to get me through this window of swapping around houses etc. and better get paid off fairly rickety tick. I think the bridge had a one year term with 6 month option on it.
rox
Veteran Member
Alan, good job on clarifying what you are attemptig to do. What you could ask you bank for is a loan with a 6 month baloon paymet due in 6 months and put up your current house as collateral/mortgaged. There are no payments du and you owe the whole note plus the interest in 6 months. try to get them to lend you the maximum against the new home and the minimum against your curent home seperate loans, the JH property with a payment plan (amortization) for the best you can get considering it does not meet the home to vacant land ratio. Say you ahve $50,000 equity in your current home. You take a $25,000 baloon loan on current home and XXXamount on JH property. Wthin 6 months you sell your existig home. You pay off your regular mortgage and your 6 months baloon loan and you walk away with $25,000 cash. Be real careful with the bridge loan, which i'm thnking is going to be a blanket mortgage on the two porperties. When you sell your existing home how much $$$ you need to pay to get them to release their blanket mortgage on your existing home. You shoudl want to walk away with some cash out of that sale and not have to pay all proceeds to the bank. You ahve to have this in writing up front not negotiate it later. It is good that it is gong to be owner occupied as oyu should get a better rate. I'm really glad you and DW ae pushing though to find a way to do this as it would be so nice to have everything on one property. Are there any zoning laws that would prevnt your wife from oeprating her business on the property?
OP
AlanB
Elite Member
OK,,,,, updating away....
Called GE Mortgage. GE is a direct Fannie Mae Lender, and it is a Fannie Mae rule about the value of land to the house, and about the Net and Gross Adjustments.
They won't do it.
Curly, the home builders place will not do it in TN, on a home. He suggested AG mortgage company out of Louisville, very helpful, just out of their scope.
Talked to my commercial banker agian today. Said that upon further review by the bank VP and P that with the mold they do not want to lend on that house...... (good greif) That if I wanted to secure a mortgage through them, I would have to hire a mold remediation company to give an appraisal of the cost to remediate that house, and place that amount of money in escrow with them in case I defaulted on the loan. Good greif, we ain't going there, I wish they had said that Friday. So the subdividing is out.
Just so happens that the banker from Farm Credit that my tractor dealer works with, came into the tractor store just after me. He spoke with her about me, and she gave him the numbers etc. to call. I spoke with him this morning, he gave me the numbers, I called, and it was nice, she say's, Oh, I have been waiting on your call...
They lend in house money. The appraisal ratio's adjustments did not bother them, the mold did not bother them. Fill out an ap, send it in we will lend 85% of sales price and away we go. Decent interest rates, better then commercial, not as good as secondary mortgage folks. 6.6 to 7 depending on terms etc.
Supposed to be able to yea or ney in a day........... Hey that rhymes
Also called the CU that is holding the current mortgage to see if they would let me assume it. Figure they are holding the paper on it at this moment, it is in their best interest to get me in there. I am sure they do not want to end up owning that house either. They have not returned my call.... (I think I am jinxed on this front)
Current thought is that if Farm Credit, nor the CU will go through with it, I need to go looking elsewhere and this buyer will have to find someone with cash.
Called GE Mortgage. GE is a direct Fannie Mae Lender, and it is a Fannie Mae rule about the value of land to the house, and about the Net and Gross Adjustments.
They won't do it.
Curly, the home builders place will not do it in TN, on a home. He suggested AG mortgage company out of Louisville, very helpful, just out of their scope.
Talked to my commercial banker agian today. Said that upon further review by the bank VP and P that with the mold they do not want to lend on that house...... (good greif) That if I wanted to secure a mortgage through them, I would have to hire a mold remediation company to give an appraisal of the cost to remediate that house, and place that amount of money in escrow with them in case I defaulted on the loan. Good greif, we ain't going there, I wish they had said that Friday. So the subdividing is out.
Just so happens that the banker from Farm Credit that my tractor dealer works with, came into the tractor store just after me. He spoke with her about me, and she gave him the numbers etc. to call. I spoke with him this morning, he gave me the numbers, I called, and it was nice, she say's, Oh, I have been waiting on your call...
They lend in house money. The appraisal ratio's adjustments did not bother them, the mold did not bother them. Fill out an ap, send it in we will lend 85% of sales price and away we go. Decent interest rates, better then commercial, not as good as secondary mortgage folks. 6.6 to 7 depending on terms etc.
Supposed to be able to yea or ney in a day........... Hey that rhymes
Also called the CU that is holding the current mortgage to see if they would let me assume it. Figure they are holding the paper on it at this moment, it is in their best interest to get me in there. I am sure they do not want to end up owning that house either. They have not returned my call.... (I think I am jinxed on this front)
Current thought is that if Farm Credit, nor the CU will go through with it, I need to go looking elsewhere and this buyer will have to find someone with cash.
EddieWalker
Epic Contributor
Alan,
Sorry to hear of all the headaches your having with this.
Two things come to mind. How long has the house been on the market? I'm wondering if others have tried to buy it and had the same problems. The apraisal has it worth quite a bit more than they accepted, so something is sending out red flags.
The second thing I'm wondering is at what amount will the bank finance the place? They are not happy with $120,000. How about $110,000? Or $100,000?
If you can't get it and run out of options, then it's time to say what the heck. Ask them if they will take $100,000 for it?
At some point, you should be able to reach a middle ground. It might take awhile and one or the other will lose interest, but if they want to sell and you want to buy, it's just a matter of comeing up with the right number to make it happen.
How did the bank learn about the mold? That's something I would have kept quiete and not shared with anybody. There are things that can be fixed easily on a house for very little money, but if they become official, they become very expensive. Too many people get invovled with nothing better to do than create a reason for there government job and make your life miserable.
Good luck,
Eddie
Sorry to hear of all the headaches your having with this.
Two things come to mind. How long has the house been on the market? I'm wondering if others have tried to buy it and had the same problems. The apraisal has it worth quite a bit more than they accepted, so something is sending out red flags.
The second thing I'm wondering is at what amount will the bank finance the place? They are not happy with $120,000. How about $110,000? Or $100,000?
If you can't get it and run out of options, then it's time to say what the heck. Ask them if they will take $100,000 for it?
At some point, you should be able to reach a middle ground. It might take awhile and one or the other will lose interest, but if they want to sell and you want to buy, it's just a matter of comeing up with the right number to make it happen.
How did the bank learn about the mold? That's something I would have kept quiete and not shared with anybody. There are things that can be fixed easily on a house for very little money, but if they become official, they become very expensive. Too many people get invovled with nothing better to do than create a reason for there government job and make your life miserable.
Good luck,
Eddie
