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Author: LadyIanna Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 126961  
Subject: New Buyer - Cash sale - other questions Date: 8/6/2013 4:49 PM
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Hi all!

I have about half a billion questions about mortgages and buying a house. I'm going to attempt to list a few of them here and hopefully y'all can help me out. ('Cause you all are most helpful people!) (and smart too!)

my background - I am living with my elderly parents - have been taking care of them for the past 10-15 years. I've been not working for the past... 5- 7 years. I currently don't have an income. I also have no expenses. well minimal expenses: car insurance of approx $300/yr, student loan payment - currently $0/mo (income based). (LBYM is my daily mantra)

Now having said that - Here's what I want to do: I want to move out of my parents house into a house in another state and get a job. (and a life!)

I've gone round and round with this for quite a while (couple years at least)
I could:
1: get an apartment in the area I want to live and find a job to pay for it. Apartments are $600 and up (utilites not included) I would need cash up front to do this.
2. getting a job while living here is not an option. Parents are too distracting, and would be calling me at work all day. IE: cant work 2 full time jobs at the same time.
3. my ideal would be to buy a house with a rental apartment and get job and use rent to pay mortgage.
4. Buy a fixer upper for cheap and get job to pay inexpensive mortgage payment. (50k or under) (most likely 20-30k)

Having stated those goals - I would need the following:
A. Help from my parents to obtain mortgage or cash funds. Being very intimate with their finances, this is very possible.
B. Time to get a job
C. Plans to pay back my parents and/or get financing on my own.

With all of this in mind I have found a house that is a fixer upper with room for me and my dog and cat. (did I mention my Border Collie? another reason apt living is not a viable option.)

The house is listed for $27,000. It is in an area with readily available work in my field. It is an older house 1890's with 4 bedrooms, 1 bath. It needs a good deal of cosmetic work, electrical, and the kitchen has effectively been removed. I have seen the house, it has newer oil forced air furnace with a power vent. Chimney would need to be replaced, it's crumbling, but is not being used by the furnace. So I would think it wouldn't need to be done for occupancy. Foundation seems solid. I did not get to test plumbing but bathroom is old but intact. It's functional.

I am very handy and have been doing plumbing and electrical at my parents house for years. (also an 1800's house) Paint, plaster, sheetrock, etc. I have most of the tools I would need to update and do the cosmetic work. I also have a kitchen unit that has a 2 burner elec stove, a mini fridge and sink, that could be moved in and hooked up. Effectively providing me with an instant kitchen. I can run electrical lines, but would need to hire an electrician to update the electric box to 100amp breakers, instead of the fuses that's already installed. (I managed to get someone to do that here at my parents house for @ 1k. a few years ago. I paid for all the supplies, they just did the labor.)


Having said all of that, my problem lies in the fact that the RE agent I talked to - a buyer agent - told me that it would be a cash sale only. I was told it was not a foreclosure. As I understand it, it is owner owned. I don't understand why it is a CASH only sale. I was told I could not get a mortgage for it. Can anyone explain this to me? Is this because it's not a move in ready property, by their standards? (personally I could move in tomorrow, use a kerosene lantern and pump water by hand, I'm not particular. or I could use a generator...if I wanted to be fancy) :)

Now - If I could get a mortgage for it: Can I
1. get a mortgage in my name with my parents co-sign?
2. have my parents get a mortgage and later put me on the deed?
3. have my parents get a mortgage and later sell to me?
4. be a first time homeowner in any of these options, and would it be worth it to be a first time homeowner?

If I can't get a mortgage and it's cash only:

1. Can I use my dad's credit cards and pay cash for it, and immediately turn around and get a HELOC to pay off the credit cards? (with dad's approval of course)
2. What would be my closing costs on a CASH sale of this nature?
3. Can I use my dad's credit cards and pay cash, then turn around and immediately get a mortgage in his, or mine or both our names?

As far as occupancy goes:
1. Would I have to install a modern kitchen in complete to satisfy a mortgage company, or can I install my mini kitchen and update at a later date.
2. I am assuming that any mortgage I get would need to have electrical updated and fixed. (brought up to code) Can I get a HELOC after paying cash, using HELOC money to bring it up to code?
3. As I understand it, Refurbish Mortgages will only pay a contractor to do the work on the house and will not allow you to do your own repairs. Would a refurbish mortgage be available for a listing that is "Cash only"

(I'm having a really hard time understanding this "CASH Only" caveat on the listing.)

I know I have a half billion more questions, but these are the ones I have to start with. Any and all information will be helpful. Comments that "It can't be done" will not be accepted. Because, I know there is always a way to get something done if you try hard enough. Snark's need not apply! :)

TIA for any and all information.
Lady Ianna
(sorry it's so long)


btw.. my credit scores are in the 650 and up area. Not great but not horrible. I expect that once I get a job and start paying bills again, they will go up. (as long as I don't get myself into any additional debt, pre-mortgage.)
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