Is it possible to get a Delaware Mortgage for more than the home’s value?
January 2nd, 2008 by John Thomas
If you want to refinance a home you already own in Delaware, there are mortgage programs that allow you to borrower up to 125 percent of the home’s value. These loans are typically used to pay off other debt, such as credit cards and personal loans. As you probably guessed, these types of mortgages are harder to qualify for and have higher interest rates.
Its generally not possible to buy a home and borrower more than its worth. One exception is buying a fixer-upper property. There are Delaware loan programs that allow you to borrow the purchase price plus the cost of the fix-up. Both you and the property must qualify. You must have excellent credit, and must qualify income-wise. The value of the property after it has been repaired must be higher than the amount of the mortgage. In other words, you must buy it cheap enough so that the purchase price plus the cost of the repairs end up being less than the value of the home after its completed. This sounds great, but finding a suitable property is not that easy. There is a considerable risk involved (what is the repairs end up costing more than planned?), and the interest rates and fees are, of course, higher.
Have a Real Estate question? Feel free to give me a call or drop me an e-mail – I am here to help!
John Thomas - Citizens Lending Group - 302-368-7132 Ext.12
I am a Delaware native who has been actively involved in the Mortgage and Finanace industries for over 10 years