Are you given loans in cash by lenders to buy a house?
I’m planning on buying a house, I don’t have to put down a down payment thanks to VA loans cause I’m in the military. But I’m single, no dependents and no need for a house. But paying a $12000 rent in this area is also not worth it, better to buy a house.
My question is, I take the VA loan which I’m pre qualified for ($280k), is it given to me in cash or how does it work?
There are houses in the area that go for $50k, just the houses and not the land but you have to pay for them in cash. If my loan is given to me in cash, I was planing on getting a couple of those houses that go for $50k and rent them out.
- StephenWeinsteinLv 72 months agoFavorite Answer
It's not cash. It's a check. And it's not payable to you. It's payable to the seller.
And the VA loan program may have rules that you can only use it for a home in which you can live; I don't know.
- aLv 41 month ago
1) VA loans are to buy primary residences, not rental property.
2) The loan is approved for the amount of the property,
3)The money goes from the lender directly to the seller.
- WhoLv 71 month ago
YOU personaly never receive ANY money (cash, cheque, anything)
the lender passes it to the seller when the house sale is completed
""pre-appvoved" only means this it the MAXIMUM amount they will led you, BUT NO lender is gonna lend more than the house costs)
- Anonymous2 months ago
Sure, they send a brinks truck to your house and then just trust you with it.
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- ?Lv 72 months ago
The buyer chooses a closing agent to handle the sale (seller can choose a seperate closing agent to handle it for them, if they want). The closing agent handles checking the title and gathering all the infor for the sale. The loan money goes straight to the closing agent and from there is given to the seller (minus whatever needs to go to the bank to close all mortgages/ debts on the property which the agent sends straight to the bank).
- ibu guruLv 72 months ago
No, you don't see a penny of cash in your pocket. And you need a separate mortgage for each property (unless you actually have ready cash saved up in your bank account). No lender can lend more than a property's appraised value.
A house going for $50k these days probably needs a great deal of work before you can live in it or get occupancy permit to rent it out. Which is why these deals are cash-only! They do not meet lenders' qualifications to write a mortgage on them.
BTW, VA loans might not need a down payment, but buying any house without paying a down payment & keeping your mortgage lower than resale value of the home is really-really-really stupid. As with stock market or real estate or anything at all, prices can go up OR down. If prices take a tumble, and you owe more than that current market value of that property, you can get yourself into terrible financial trouble overnight.
You ARE going to need money when buying a house. E.g. you need to pay homeowner's insurance premiums for a year in advance to close the purchase & mortgage. The lender then delivers the money for the purchase to the seller, not to you. You'll need funds for any painting or other work you want done to the house, moving costs, and more.
- 2 months ago
I think they'll write you a check
- LILLLv 72 months ago
No. They will cut a check to the seller for the mortgage amount. You will never have cash in hand.
- JudyLv 72 months ago
Not a snowball's chance in h*ll they'd give you th cash and just trust you to us it for what you said you would. Th money goes to th seller at closing. And it's only 280K if the mortgage you're taking is that much.
- ScottLv 72 months ago
No. The money never passes through your hands.