REO question on financing

**filbert** · 04-12-2010, 03:51 AM

I'm just wondering if it's possible to borrow more than the sale price on a REO home. Here is the situation:

I have good income (200k+) but need to pay off some debt (80-90K to be debt free). I am looking at a brand new bank owned listing that has a price in the mid 400's. This house was listed for 850K originally (custom built, waterfront.....) but has never sold. If I bought for, say, 425K and was able to finance roughly 500k to pay off all outstanding debt, I would not have any problem with payments. I have good credit and would think the bank would be happy to get this property off the books.

Anyone with any thoughts or experience with something like this?

**Greg** · 04-12-2010, 06:03 AM

Lending more than a house was worth is how the banks got into the mess we are in right now.

I doubt you will be able to find any lender who will lend you more than the purchase price of the house.

**amasters** · 04-16-2010, 01:16 PM

No, it's not going to be possible to borrow more than the home's worth, or even more than the agreed upon sales price even if the home is worth more. Any loan from a mortgage lender or bank will be limited to a certain loan-to-value (LTV). What's more, lenders have always been stricter on investment properties.