Posted on: 06th Jan, 2010 09:09 pm
Hello Everyone!
I have a question. I have applied to two differnet direct loan companies and was denied. My score is low 620-630 range but was advised that this was not the reason I was denied. The prices of the homes I am looking into are under 75,000 some even $50,000. I was advised by the loan company that they wouldn't finance me because the loan amount is too low and that banks will not do a loan for under $100,000. Is this true? If so, what other options do I have?
I have a question. I have applied to two differnet direct loan companies and was denied. My score is low 620-630 range but was advised that this was not the reason I was denied. The prices of the homes I am looking into are under 75,000 some even $50,000. I was advised by the loan company that they wouldn't finance me because the loan amount is too low and that banks will not do a loan for under $100,000. Is this true? If so, what other options do I have?
At times, loan companies will not be ready to give you a mortgage on a property which has low value. This is totally the discretion of the lender. You can check out with other local lenders to find out if they can help you with a loan. You can also seek a no obligation free mortgage consultation with the lenders of this community. This consultation will help you know whether or not you would receive a loan.
What you will find is the rate will often be higher or you will pay points or origination fees to get a loan below $100k
before you apply again, pick up the phone and call everyone in your area to see if they'll do the loan as you need it.
Wow! Try some of the mortgage consultants on this site. Someone should be able to help you and DON'T run your credit again.
Look at FHA loans.
Best, try to see a mortgage broker. They can go with you through the process and they should know which banks would offer you money and which not.
FHA doesn't look at credit, plus you can put down 3.5% and you can get small loans. We just saw someone yesterday for a $60,000 loan. The rate in Champaign Il given by FHA was the same with the one given with a conventional loan: 5.25%
Best, try to see a mortgage broker. They can go with you through the process and they should know which banks would offer you money and which not.
FHA doesn't look at credit, plus you can put down 3.5% and you can get small loans. We just saw someone yesterday for a $60,000 loan. The rate in Champaign Il given by FHA was the same with the one given with a conventional loan: 5.25%
Smaller loans are typically less profit for the same amount of work. So when you're dealing with any cookie-cutter mortgage shop, they would just as soon not be bothered.
In addition, in my area, when the loan amount gets that low, the property isn't typically something that's even eligible for normal financing. A house can actually be too small in some cases.
Like George said, call everyone in your area, stay local. There will be someone who can help you. Your rate might be slightly higher than the published market rate. For example, I know that Wells Fargo charges around .75-1.00 points more for a loan under $75,000. Which could bump your rate 0.25% or so, or you could pay the 1 point ($800 on a $80,000 mortgage) to keep the rate the same.
In addition, in my area, when the loan amount gets that low, the property isn't typically something that's even eligible for normal financing. A house can actually be too small in some cases.
Like George said, call everyone in your area, stay local. There will be someone who can help you. Your rate might be slightly higher than the published market rate. For example, I know that Wells Fargo charges around .75-1.00 points more for a loan under $75,000. Which could bump your rate 0.25% or so, or you could pay the 1 point ($800 on a $80,000 mortgage) to keep the rate the same.
As a first timer, I don't know what I don't know. I'm learning as I go. Thank for all of your help! It is much appreciated.
You're most welcome! Guest. If you've any queries, feel free to ask. :)
ditto here, too, confused. keep asking questions, because that's how we learn after all. if i hadn't been asking back when i started in banking, i wouldn't have progressed to this point. not only that, but when we close our minds and think we know it all alread, we begin to regress. i think i may have to write something a lot more detailed about that last sentence - ya think?
i am in the same boat and can't get anyone to touch a refinance for under $100,000. although usaa's mortgage branch told me just today that pres. obama has pushed some sort of fha policy guidance out which addresses the $100,000 minimum loan requirement. the loan processor did not have details but told me to call back next week (friday) and they should have better details on the guidance...but today i don't qualify.
here is too hearing something positive next week. like...yes...you qualify to refinance your current $50,000 loan which is killing you at 8.5% for a lower apr.
here is too hearing something positive next week. like...yes...you qualify to refinance your current $50,000 loan which is killing you at 8.5% for a lower apr.
If there are no lenders offering loans under $100,000, then thousands (or more) houses will go unsold due to depressed values across the nation, the foreclosure crisis, etc. It's hard to imagine that it's that hard to find a lender willing to assist.
I was told sense my VA loan is only for 80,000 i would have to pay a higher interest rate. Is this true?
Welcome Phil,
Low amount of loans may have higher interest rates.
Low amount of loans may have higher interest rates.
we are looking for financing for a condotel that has a price of 55,000.00. is there any loans for that amount?
Hi daniel!
Welcome to the forums!
Well, it may be a bit difficult for you to get qualified for a low loan amount of $55,000. Nevertheless, you can still contact the local lenders and apply for a loan. Apart from that, you can even speak to the local private lenders and check out if they can help you in this regard.
Feel free to ask if you've further queries.
Sussane
Welcome to the forums!
Well, it may be a bit difficult for you to get qualified for a low loan amount of $55,000. Nevertheless, you can still contact the local lenders and apply for a loan. Apart from that, you can even speak to the local private lenders and check out if they can help you in this regard.
Feel free to ask if you've further queries.
Sussane