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I've learned over the years that almost all investors want mortgages that give them loans that include money for fixing up and fixing up investment properties.
There are many programmes for investors, and there are thousands of mortgage companies that offer them. Some mortgage companies have programmes that include money for repairs and renovations in the loan package. Some programmes set up escrows for repairs and renovations, and the work in progress is inspected before the next payment is made.
Due to the large number of rules and the fact that different lenders have different policies, we are now putting disclosures in all of our real estate purchase agreements and related forms to make sure that buyers are using lenders with programmes that work for the borrower (the buyer), the seller, the realtor, the wholesaler, and the lender.
In our purchase agreements, addendums, assignments, and buyer broker agreements, we now use the following disclosure language:
Restrictions for the lender and the title company. Both the buyer and the seller agree that the buyer will tell the buyer's lender everything important about the purchase of this property. Due to the nature of this transaction, the buyer (s) will only use a lender that lets the buyer get money from the seller to cover allowable closing costs, allowable allowances, and costs of rehabilitation and renovation. This purchase agreement is null and void if the buyer(s) and/or the lender they choose willfully break any state or federal laws that apply to this transaction. If the buyer is found to have broken the law, they agree to lose their good faith deposit.
As part of their services, title insurance companies follow the terms and conditions of the purchase agreement and any other sales documents that are important. They make sure that the purchase agreement and other papers you use to buy or sell real estate follow what the lender, the Title Insurance Company, and the law say you need to do. They look over the HUD statement and make sure that all charges are on it so that the lender can see all of the costs that are being paid at the closing. For instance, the closing statements should include commissions, escrows for rehabilitation and renovation, builders' allowance, wholesaler's fees, and assignment fees.
Ask the Title Insurance Company to change their closing statements if they don't put an expense on the HUD or other closing documents. If they can't, and/or if the closing has to happen as planned, make sure that all parties sign off on the changes and are aware of them. It goes without saying that the Title Insurance Company needs to let the mortgage company know about the mistakes.
