My fiance and I are looking to purchasing our first home. We already have a home in mind that is a fixer upper. The home is owned by my retired mother and she has a HELOC with ~$115k on it. Property value of identical homes on the same street go for around 250k.
She wants to move back to her country of origin to live with extended family. She doesn't want the property any longer and wants to give it to me. My fiance and I were thinking it might be a good idea to go for an FHA 203k loan for the low down payment as we don't have 20% saved up yet and we could use it to pay off the HELOC for her so she can go home. We don't plan to stay long term and want to move to another state within a couple of years. Would it be feasible to refinance with a VA loan for the $0 down after 6 months?
Our line of thinking is:
$115k loan / pay off HELOC for mother so she can go home in peace
After repairs appraisal to ~$250k for equity
Refinance for $0 down/no more PMI
Sell for close to same or better market value or rent out when we choose to move
Am I missing something? Or is this a solid plan? Anything that could be a better strategy?
Much appreciated in advance.
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source https://www.reddit.com/r/RealEstate/comments/suisuv/fha_203k_to_va_loan_refinance/
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