I just really want to know if there is a house sold as is, then is financing ever allowed in this case? I am asking because I see a lot of houses like this online, but I never know if financing is possible and I would rather have a general idea than to keep asking about every individual house. Also, why is it that houses that are sold as is are often not able to be financed? I's there a particular reason why?
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Certainly. As long as the appraisal justifies the lender's risk, they shouldn't have any reluctance to loan the money for a house "as is", which is how MOST houses are sold, and certainly all of those that I have ever bought.
it is not so much what the house is but what you are capable of paying for, the loan is based on your financial situation, and you need to have a down payment and good financial sources
houses sold as is could very well appraise out for less than is being asked and the lender may not lend on its basis since it is held as collateral for the term of the loan
Most houses are sold as is.
All 'as is' means is that the seller will not do, or pay for, any repairs a lender may say must be done before they will give a mortgage on the property. It doesn't mean that they will not finance the property.
It could mean that you can't buy that property, because you may not have the money to pay for the repairs AND the money to pay the down payment and closing costs.
The mortgage lender wants to know that the home is worth the money, not something in need of razing and rebuilding. They want to know that they can get their money back if you default.
There are two reasons a home would be sold "as-is". 1, the seller knows of some small issues that need attention (painting, faulty electrical system, flooring in bad shape), but aren't willing to spend the money to fix them. 2, there is at least 1 major issue (foundation is bad, fire, half the roof is blown off, that sort of thing) and don't want to spend the money to fix it.
Minor issues might pass for a mortgage, while major issues probably won't.
I found a large house, big yard, wrap-around porch on 2 sides with jealousy windows all around, large attached garage, really looked good from the outside. Seller was asking $25,000 in a market where it should have been in the $90-100k bracket. Got inside and saw why... the interior was destroyed. All plaster walls torn out, all wiring torn out, the furnace was destroyed, the entire kitchen was pulled apart and busted up... and the list kept going. It had been used as a rental, and the last tenants had not taken it well when they were evicted. It would have taken minimum $50k to put the place back together, and probably more because I didn't take the time to really look into what all was damaged. This is the kind of place that a mortgage lender probably won't approve.
You would be able to purchase the house "as is" with a conventional mortgage.
The house will have to be habitable.
Many older homes are sold "as is" as the sellers don't want to deal with nit picky buyers.
The house would have to pass inspection. The bank will not back a loan if the property isn't worth the price.
Not with a standard mortgage, but there are some special mortgages that let you roll costs of a contractor doing some rehab/repair work. Rules are very strict on spending the money.
Sure. There are lots of mortgage options for houses sold as is. The only options that don't exist are (most) government insured loans.