spending on an REO property even before closing

[Naseera Mohamed]

My mortgage broker has convinced my husband to spend on some improvements in the house that we have a contract on,, so that it would appraise correctly and help him get approved for the loan. I am not so convinced this is a good idea. Is this a normal or at-least not-unheard of thing?

[Wade G.]

I have done it. I don't recommend it though and I doubt I would do it again. I was approved for a 30 year investment loan but the house did not have any carpet in it. I did not have any plans on going the hard money route so my only option was to cover the concrete floors or back out of the deal and lose my earnest money, plus it became sort of a challenge to get the deal done so I had to do it. Luckily I had a crew of carpet guys that could get their hands on some old used carpet. It was disgusting carpet due to animal waste...I mean man it was bad. Nevertheless, they roughly installed the carpet and it met the requirement of floor coverings so I got the house. Stupid, stupid lending guidelines required covered floors in order to be considered livable...an animal wouldn't want to live on that carpet but it got the loan approved. That was my second investment property and it taught me about the livable condition rules for conventional loans.