Six months ago a house flipper purchased a home with the intention of renovating and reselling the home. As he started renovating the home, he fell in love with his work and decided he wanted to permanently live in the home. He called me to discuss a strategy to get a mortgage, as he paid cash at the time of the purchase.
Based on current guidelines he could get a mortgage based on 80% of the purchase price, plus the renovation costs. The key is detailed documentation for the renovation costs. This individual was very meticulous when it came to record keeping, so I didn’t see the mortgage process as a difficult issue, but there was another issue.
He had to sell his existing home and that home had a good size mortgage and would have to put on the market at around $400,000. I referred him to a Realtor that I work with on a regular basis. The Realtor put together a great marketing plan and the property was put on the market at $379,900. Fortunately the property went on deposit within 3 weeks and all was coming together.
Find out what's happening in Manchesterwith free, real-time updates from Patch.
Based on the sale of his existing home, we are now going after a 75% loan instead of 80%. The best part of the entire transaction, he will end up lowering his monthly mortgage by nearly $800 per month.
