Can I get a mortgage loan for more than the house costs?

My grandparent are willing to co-sign for a loan for me. Is there any way to get more than the house is worth so I can pay off my credit card debt (8k)? If I could get more than the house costs I could afford to own a house (instead of living with my mother indefinitely) but if not, I wouldn't be able to afford a mortgage payment plus credit cards. Right now, I'm paying around $600/mo towards my debt, so I could afford at least that much in a mortgage payment. I just wonder if it's possible to get more than the house is actually worth, especially with the economy how it is.

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  • 1 decade ago
    Best Answer

    My understanding is that there are special loans that you can get that allow you to take out more than the cost of the home, however this is is very special case, and can only be used for home renovations/home rehabilitation. There are no longer loans with no down payment, so keep in mind that you'll have to come up with at least 3.5% down payment (FHA loan) plus closing costs (usually about 5% of the amount of the loan), but you might be able to ask the seller to cover these.

    One thought: if you buy your house in 2009, and it's your primary residence, and you're a first time home buyer, you can receive a tax credit of $8000. So, if you can come up with the down payment and closing costs, can you perhaps just pay off the minimum on your credit card for now, and then when you get your tax credit in 2010, finish paying off your credit card at that time?

  • 1 decade ago

    The issue isn't what the house costs. It's what the house is appraised for. But don't forget, to buy a house, you're going to have to put down some cash -- 20% of the purchase price is typical, although you might be able to do it for less. And you'll have to pay closing costs, which will be in the thousands. You need to talk to a financial adviser about the specifics of your situation. Homeownership is great, and offers many advantages, but getting out of debt and saving up for a down payment are usually higher priorities. There could be opportunities to lower the interest rate on your credit cards too, if you've been paying faithfully and have a good credit rating. $8,000 is really not that high of an amount, but if that much is a stumbling block toward buying a house, then maybe buying a house isn't the best thing for you right now. Believe me, as soon as you move in, there will be expenses you never even dreamed of.

  • Anonymous
    3 years ago

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    RE :Can I get a mortgage loan for more than the house costs?

    My grandparent are willing to co-sign for a loan for me. Is there any way to get more than the house is worth so I can pay off my credit card debt (8k)? If I could get more than the house costs I could afford to own a house (instead of living with my mother indefinitely) but if not, I wouldn't be able to afford a mortgage payment plus credit cards. Right now, I'm paying around $600/mo towards my debt, so I could afford at least that much in a mortgage payment. I just wonder if it's possible to get more than the house is actually worth, especially with the economy how it is.

    1 following 13 answers

    Source(s): For Finance and credit solutions I always recommend this site where you can find all the solutions. http://SMARTFINANCESOLUTIONS.NET/index.html?src=tx...
  • 1 decade ago

    The day of the high-loan-to-value mortgage are long gone. The most banks are going for these days is typically 80%, which means you need at least 20% down plus closing costs in cash. With your debts, even if your grandparents loaned you the down payment, you'd have difficulty getting a mortgage through -- you'd be paying mortgage + down pmt loan + credit card debt = banker conniptions.

    Pay off your credit cards and save up enough for 20% down + closing costs.

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  • 4 years ago

    Usually the answer is no but it is a function of your loan-to-value ration. If the house is worth much more than your loan amount, you can borrow against the equity. As a extension to this, you may be able to borrow against your down payment. If you say, put down 20% and you find an home equity loan that will go to a 90% LTV, then you can borrow half of your down payment. This may sound tricky but many loan brokers do this for people with less than the typical 20% down payment. Be weary of loans offering 100% or higher LTV. They are very dangerous. You have the right idea-Good Luck!

  • 1 decade ago

    No. It doesn't sound like you're in a position to buy a house especially since you're looking to have your grandparents (who are on a fixed income) co-sign on a mortgage loan. Plus you will only get a loan for your new house minus your down payment. You should get your cc paid off then get prequalified for a home loan.

  • 1 decade ago

    no way not for debts you owe. Pay off the credit cards first then get a home. You would be a foreclosure waiting to happen so get yourself prepared to buy a home and save up the down payment and closing cost and also an emergency fund of at least 6 months living expenses before you even think about trying to buy

  • 1 decade ago

    Those days are long, long gone.

    Now you need 10% with immaculate credit, or 20% down with normal credit.

    Since you are carrying credit card debt - which destroys credit ratings you will definitively have to put down that 20%.

    Also, any credit card debt that you carry will directly affect your monthly mortgage payment you will qualify for.

    Get rid of credit card debt.

    Then, save up a down payment, then you can move out.

    Credit card debt is destroying your credit worthiness....

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  • Anonymous
    1 decade ago

    Not anymore. After a year in your house you could apply for line of credit against your house. That can be up to about 30,000 based on your credit score and your property value.

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