Questions re: 1st Time Home Buyers

**mark1154** · 08-26-2010, 06:16 AM

My 27 year old son and his fiancee' are currently living in a row home owned by 4 of our family members. They are contemplating the purchase of the home. It needs extensive renovations. My son's fiancee' is a teacher and earns 46K. My son is in Graduate School pursuing a Masters Degree and has no full-time job. They may offer somewhere in the neighborhood of 110K for the house. They are currently getting renovation quotes from contractors.

They understand that they can apply for an FHA loan that will cover the purchase of the home and future renovations with 3.5% down (if they qualify). My question is: If they were to apply for a conventional loan with a 10% downpayment and an additional purchase of mortgage insurance, could they then apply down the road for an FHA Construction loan to begin renovations after they've saved some money?

If anyone has some other suggestions in this scenario we'd appreciate your input. The house is located in Baltimore City, Maryland.

**Greg** · 08-26-2010, 07:58 AM

Your questions need to be directed to the lender who will be making the loan. Anything you get here will be pure speculation as we do not know the details of your sons financial situation.

At one time the city of Baltimore had a program to help renovate old houses.

**Luxury Homes Tampa** · 08-26-2010, 10:37 PM

I think you should consult a real estate broker or a person who is professional in making home loans. Here, all are not as expert as they are to advise you regarding your problem. Better you hire a real estate agent who can guide you properly.

**vijendrasnv** · 08-28-2010, 04:24 AM

For first time home buyers it is very important to consult with lenders or agents so that, it will be helpful for them to get homes in better price value.

**Jonathan Radford** · 09-03-2010, 01:34 PM

These comments have touched on some important points.

1. You should consult with several different lenders to see what they have available for financing - both now and into the future. Mortgage rates are incredibly low right now but they are harder to get. This should be part of your considerations.

2. Look into incentives that the city is offering you. If you can save money that way (both in the purchase and repairs later on) then you will end up much better off.

**francinebourne** · 09-08-2010, 12:20 AM

Since you are a first time buyer it is safe to seek advice from real estate agent just make sure that agent license and trust worthy.

**TeamAguilar** · 09-08-2010, 02:53 AM

Originally Posted by Greg

Your questions need to be directed to the lender who will be making the loan. Anything you get here will be pure speculation as we do not know the details of your sons financial situation.

At one time the city of Baltimore had a program to help renovate old houses.

I concur to the above comment!
Try to get advice from any banker if you know..it might be helpful.

**aliikane** · 09-10-2010, 02:54 AM

that is a question for your mortgage broker and lender. every lender is different and have all kinds of different programs for different situations.

**realestategirl** · 09-30-2010, 10:12 PM

If your son and his fiancee have a mortgage lender, they may need to talk to them first. They may also need to check their credit scores and available funds. The FHA requires a credit score of at least 620 and be able to pay the minimum downpayment upfront.

**CalgaryListings** · 10-02-2010, 10:08 AM

In Canada the future mortgage would be considered a refinance and often the refinance mortgages require more equity to be able to do them. As an example buyers can buy for 5% (in some cases less) down but to refinance the home you have to have at least 10% equity, and very likely there would be a payout penalty to the first mortgage a well. I would suggest discussion this with a mortgage professional, but I would lean towards only financing the property once, not twice. If they do some renovations on the property to improve their value, perhaps they can look at putting on a line of credit on the property in addition to the first mortgage, that seems to make more sense to me.