Can Lender Forcibly Make HOA Payments?
I am preparing to close on a property and as I was reviewing the note, one clause stated that the lender had the right to step in and make payments on HOA dues, Taxes, Insurance ..etc and turn around to make them part of my monthly payment if they so desire.
I do not recall ever having seen this before and find this quite starenge. I should point out that this loan does not have an impound account associated with it so I am paying a slightly higher interest rate but I am thinking that this is a clause that allows them to get past this issue.
Can they use this to create an unwanted escrow account? They do not give any reason for being able to do this, just that they reserve the right to make this happen and that I have to agree to pay whatever they paid as part of my monthly payment.
Seems like a back door to an escrow account to me.
Thoughts?
JS
I would invest in 401K, roth IRA. Also get money magazine, lots of good tips and you can usually find it for $10 a year subscription.
Save the money until you have a decent cushion of cash that you can sit on... Then start paying that $150 per month to the mortgage principle...
Just my 2 cents!
Good Luck!
[addsig]
Is this the house you will be in for the rest of your life?
If not, then you are just going to sell and pay off the mortgage in the next five to seven years -- long before you could get the loan paid off. Invest your extra cash.
If so, then make extra payments against principal each month so that the payoff on your mortgage loan occurs about the same time you plan to retire.
You can find lots of mortgage calculators on the web that will tell you what your monthly payment needs to be to fully amortize your loan before you retire.
I would use the extra $150.00 to pay down the principal. Think of your equity as a savings account.
You can always gety a home equity line if you want to fund an investment.
[addsig]
amazing how many answer without this info
whats the interest rate on the mortgage.
what is the rate of return?
there is your answer, and keep in mind both accounts probably counter act themselves with tax savings (interest on the loan is tax deductable, but interest on investment is taxable).
which ever is higher, put it there, unless the vested time of the 150 is too short term (under 8 years) paying the mortgage would make more sense, due to the front loading of the interest.
hope this helps
that is a funny response. you are deducting a cost to borrow that you pay. if you did not have a mortgage, instead of being able to write off 20K in interest (just an example) you would have 20K in the bank. despite your tax braket, 20K cash is much better!
WIth the fluctuation in land prices it Florida it is probably going to be difficult to use vacant land as collateral.
If the houses are rented and you can prove they have good cashflow then even with that score you should be able to get a mortgage. You could do a prequal and make sure you choose a lender that does as-is plus repairs.
How far below market is it? How much work does it need? Have you calculated the holding costs and time?
Is it possible to get any Credit cards?
I made a purchase a few months ago for a property and used a card with a 18month 0% interest balance transfer to finance the repairs. That might be one option if you are responsible.
some other suggestions might be to look at a neg am possible flex arm or a FHA 203K loan which would allow you to bury the rehab costs into the loan.
what are the details of the transaction??
fico score of buyer
any foreclosures on their credit
how many tradelines do they have
Can they go full doc
what is the purchase price
what is the appraised value ( the real number)
A good rule of thumb is 20-50 cents on the dollar. Playing devils advocate here but what would you pay for a small second lien with a credit of 520-550 and 100% CLTV? Probably not to much,
Nate-WI
A good rule of thumb is 20-50 cents on the dollar. Playing devils advocate here but what would you pay for a small second lien with a credit of 520-550 and 100% CLTV? Probably not to much,
Nate-WI
if buyers credit is good or has a long standing bank account take your note there,god blesses us all.
Why not put a balloon on this and have them refinance in 1-2 years when their credit is better? Then they may be at 90% LTV and their credit is good enough to get that type of financing. Also, they will have mortgage credit, as long as the first mortgage is with a bank that reports.