I currently own and live in a fourplex. I am getting married and will be buying a house. After looking at houses our top choice is a HomePath property. I will be making an offer on this property but had a couple questions.
The property has been on the MLS for a couple of months and has had a couple of price drops. The property does need all of the carpeting replaced and new paint inside. However I will be putting tile in most of the house so this works out for me. I am assuming some of these fixes are what is keeping buyers away from the house.
I know FannieMae doesn't do appraisals so I wasn't sure if I should get one before I make an offer. I don't believe the house is overpriced from some comps I looked at but I am relatively new to real estate so I want to make sure I don't overpay.
Since the house as been on the market for awhile with a couple of price drops should I offer below asking?
Does Fannie Mae provide any credit towards closing costs?
Is there any advantage to using the HomePath financing product vs. getting a conventional loan?
The address of the property is 351 Trenton, Clovis,CA if anyone is interested in looking it up. Thank you in advance for your responses.
We bought a homepath property for our personal home in Sept 2010. We bought it with the idea that eventually it would be a rental.
I've read somewhere that you can offer up to 89% of the listing price and they will consider the offer. Anything under that cannot be entertained. Not sure if that still applies or how true it is, so take it for what it is worth.
The benefit to using the homepath financing is that if you can get the regular homepath loan (not the renovation loan), you can put 3% down and not pay PMI. I'm not sure what the terms are on the homepath renovation loan for owner-occupiers. For investment property, I believe it is 25% down.
We started going down the regular loan route and then someone in homepath changed our house to a renovation-loan only property and our mortgage person talked us out of the loan and into a regular conventional loan. My advice on this point is that if you want to use their financing, use one of the mortgage brokers that are listed on the website.
The second house we bought on homepath after purchasing our primary home, we used one of their suggested mortgage companies and the process was much smoother and they knew what they were doing with the homepath loans.
Our mortgage company that we used on our primary house gave us a lot of mis-information about the homepath renovation loan and in the end, I wish I would have gone with that loan instead of conventional. She told us that we couldn't make cosmetic repairs, like kitchen cabinets, etc. Just things like new roof, foundation repairs, etc. But, I have been told since then that that is not correct.
As far as needing an appraisal, that is up to you. We didn't get one, but that was because we had already lost the house once to a higher-bidder and were able to get the house when they backed out for $5k cheaper than we had bid the first time. We wanted the house and knew that it was a good price for the neighborhood.
We didn't ask for any closing costs on our primary home, but we learned when we bought the second house with homepath that as an owner-occupier, we could ask for up to 3% cash back. With the investment property we asked for 2% closing costs (which is the limit for investment property) and received it.
This second property was bought in Jan 2011, so things may have changed with the closing costs, but it doesn't hurt to ask... especially if the house has been sitting for a long time.
Our investment property had been sitting so long that the bank had actually fixed it up (new carpet, paint, etc.). We asked for a home warranty and for minor repairs to be fixed. They didn't fix the repairs but gave us the estimated repair cost at closing...