No, this is HomeSteps. HomePath is Fannie Mae and HomeSteps is Freddie Mac. Unfortunately, HomeSteps does not do financing in Minnesota yet.Originally Posted by Matt Meiser
This is the same Freddie Mac home I have been working on for a while.
[OP]
Contributor
No, this is HomeSteps. HomePath is Fannie Mae and HomeSteps is Freddie Mac. Unfortunately, HomeSteps does not do financing in Minnesota yet.
This is the same Freddie Mac home I have been working on for a while.
Contributor
Plent of the houses on the market in my area are second &/or third time foreclosures.I am getting a conventional rehab loan. I have tried to find another mortgage company that will allow better terms, but I have not found anything
A lot of the owners took out a 203k or conventional rehab loan (Homestyle- IIRC is what they call the non-203k version).
Where they get nailed is with the deadline for work & the fact that they are really paying for a loan that their house can't cover - even with a substantial down payment.
In this case, the payments and the loan are based on the finish price of $241,000.00.
That's the amount the lender is going to come after you for if, God forbid, something happens and you can't make the monthly payments.
Meanwhile, the value of the uncompleted property is what it is.
And based on the huge losses I've seen - uncompleted work on a property is just as bad, if not worse, than something being in need of repairs.
Bottom line here is - asking for our opinion on this is pretty meaningless since it's a pretty high risk undertaking.
I'm not at the "higher risk" stage of life.
Yes - I'd buy a $150,000.00 house that needed $90,000.00 worth of work - but - only under very strict lines.
No - I'd never take out a rehab loan @ this stage of my life & with my present financial situation.
Keep in mind that - the higher the risk, the greater the potential rewards.
"Life is what happens to you while you're busy making other plans." - John Lennon
[OP]
Contributor
I would expect the rehab to take three months at most. The majority of the work is the heating/cooling system and the siding/windows/doors. At that time the house will be complete and fully liveable. I have no worries about the project getting half done and running into financial ruin.
If I bought another house I would still be taking out a similar size mortgage. I'm currently looking into a really nice house that is $280,000, but it has a 36x56 garage that is big enough for my motorhome. The downside is it uses propane for heat so it could cost 2.5 times as much as gas heat. It is also an additional 8 miles each way to work, but reasonably close to commuter rail.
Member
Brian, there is a "rule of thumb" that applies here (some posters have already mentioned it directly or alluded to it, so I'm just chiming in). Don't over-build for the area where the house is located. However, most of the items you listed are cosmetic and maintenance and do not result in over-building, in my view. If it is reasonable that this house would be valued at approx $250,000 if it were new in this location, then your money is probably safe. In any case, you should plan on living there for, say, 10 years, which reduces your risk. Sounds like the bank is pretty strict on priorities and standards.
Contributor
Yes - but the huge difference is that the other house would have it's full value.If I bought another house I would still be taking out a similar size mortgage.
The rehab house only has it's full value once all the work is completed.
& as I mentioned above, one of the "gotcha's" people around here ran into was with the contractors completing on time.
It's a risk but - you could end up sitting real pretty if it all works out.
"Life is what happens to you while you're busy making other plans." - John Lennon
Guest
I lot would depend on the GC and quality of materials being used. Anderson windows sounds great. But if my new bathroom was going to have the cheapest flooring and if the fixtures were going to be cheap builder stuff, I'd be concerned.
[OP]
Contributor
I don't plan on selling this house any time soon, but you never know. I stayed in my last (and first) house for 12+ years. The contractor talked to me about how long I was planning to stay when pricing the bathroom remodel. He basically said if I planned to live in the house long term that I should install a tile surround on the tub and tile floors.
The house has three bathrooms. The main bathroom in the house needs a full gut and redo. It appears the previous owners started a bathroom remodel, but never got beyond demo. The toilet, exhaust fan, sink, and counter are all missing. I doubt they got mad and stole the stuff because they didn't touch the other bathrooms. I was planning to redo the bathroom myself, but I was told that I might have a hard time with the appraisal if the main bathroom was in shambles. Technically, I only have to have one working bathroom.
Member
Generally speaking the reverse is true; great potential reward requires high risk.
But high risk doesn't necessarily have great potential rewards. Often it is just foolish.
[OP]
Contributor
I am still looking at other options for a house while I wait on the other bids to remodel this house. One house that looked good has an outbuilding that isn't tall enough inside.
Contributor
Generally speaking the reverse is true; great potential reward requires high risk.
How is that the reverse of the higher the risk, the greater the potential rewards?
They both read the same to me.
If I bet on a long shot horse and it comes in, I get a higher reward.
"Life is what happens to you while you're busy making other plans." - John Lennon
Member
Remodeling and schedules are both approximations of what you really want.
In no way would I consider living in a construction zone.
Drywall dust will be settling, long after the crews have gone.
Whenever that happens.
Contributor
This ^^^^
I know folks do it, see it on DIY shows, etc., but whatever someone thinks they are "saving" by not renting an apt. or whatever, I don't know how a family unit can function in a house that has a major remodel going on. At least not without contemplating divorce or something, LOL. The noise, chaos, lack of climate control, dust, etc. I just don't know how anyone can deal with it. Just my 2-cents, anyhow.
Erik Loza
Minimax USA
[OP]
Contributor
I'm currently living with my parents and would remain living with my parents until the house was ready for move-in. I would not be living there during construction. The sale of my former house closed more than two months ago.
Contributor
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Erik Loza
Minimax USA
Contributor
I did it twice. Really no choice. I wanted to do the remodel and absolutely could not afford to go live some place else. One remodel was a kitchen - but pretty major. Added on to the house to make the kitchen larger. We used the microwave and washed dishes in the bathroom sink.
The other was a complete renovation of the second floor. Basically took down all the walls and reconfigured the upstairs, All the bathrooms were reconfigured and, of course, all new fixtures. Used the downstairs bathroom which luckily had a shower.
It was a mess but I was able to monitor the work pretty well. I didn't feel it was a real problem for our marriage.
Mike
Go into the world and do well. But more importantly, go into the world and do good.
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