How to get bank to loan more money?

Question

I am trying to buy a property in a market where the average home price is in the 300-400 k range. Occasionally houses come up in the high 200k range.

I have about 70-80k ready for a downpayment on a place. However, I am a teacher and my income is only about 2k a month gross. As of now, that is with putting all my money down. I have talked to two banks and one qualified me for a loan for about 200k and the other one for 210k, that is with me putting everything I have down, no room for rehab expenses. Obviously that makes me the opposite of a competitive buyer. Whenever there is something I can afford, the bidding war is so insane that I don't even want to put in an offer because I know the property is never worth that.

Is anyone else in the same boat here? How can I become more competitive. I know banks don't count partners as rental income, even if they pay you rent. And yes, I have inquired about putting him on the loan too, but it would only get me up to about 245k. Plus, I want to own something by myself, without other people involved in the process.

Any ideas?

Cris Normandt · Answer

HI @Theresa Reynolds, I would start first by getting away from a bank and go speak with a lender who can get more creative. I know there are 203k loans for rehabs and there are options such as "homes for heros" which you should look into as well. These might not get you to where you want on the loan amount, but they will limit costs and help on the backend.

Jaron Walling · Answer

@Theresa Reynolds A lot of first time buyers are in a similar situation. You have options but each require sacrifice. Pick your poison.

1. Find a better job. Easier said than done but not impossible right now. Companies are hiring everywhere.

2. Off market deal. Research, network, and connect with locals in your market. Find or create a deal that works in your favor. Eliminate the outbidding situation.

3. HML, family, friends, or partner. This is closely connected to #2 because if you find a good deal money will follow. If you have great credit, no consumer debt, bla bla, someone will loan you money. You don't need a conventional bank to make this happen.

4. Pick another market. This is the worst case scenario because it creates more challenges. Without experience I don't recommend it.

How to get bank to loan more money?

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