Posted on: 09th Jan, 2011 08:07 am
Why can’t this scenario work? I find a house that has been appraised at $200,000, the owner sets the price at $200,000. Why can’t I get a loan for that amount, why must I have a down payment of, say 10%; $20,000 is such a small fraction of the total amount. Wouldn’t the lender or the seller make more money with this 100% loan?
Hi tommyp,
You need to pay a down payment from your end in order to get the loan. Lenders will only give you 80% of the value of the property as a loan. The down payment will be a sort of a proof that you will be able to pay off the mortgage on time in order to get the property free and clear.
Thanks
You need to pay a down payment from your end in order to get the loan. Lenders will only give you 80% of the value of the property as a loan. The down payment will be a sort of a proof that you will be able to pay off the mortgage on time in order to get the property free and clear.
Thanks
FHA allows for 3.5% but, you're required to put $ down no matter how you slice it. They want to see that you have money invested into the transaction. Statistically, more people have walked away from homes they didn't put a down payment on vs. people who have.
