Posted on: 19th Feb, 2009 09:41 am
I am a first time home buyer, and have been looking for a small house near Downtown Indianapolis. There are many forclosures in these areas and we found a cute little bungalow in good condition for 30,000. We have very good credit and have been looking for a loan. Everyone has told us that we will have to have a 6.5-7% rate because the house is so inexpensive. We have 6,000 to put down, but have been told that we will have to have 9000 to cover 20% down and closing costs. That makes closing costs 10% of the home value! It seems ridiculous to me, but I'm totally new at this. Are there reasonable mortgages for this cheap of house?
Barb, I'm afraid you might have a struggle to attain your goal - most lenders are leery of small loans. They cannot price them appropriately to avoid compliance problems with annual percentage rates, maximum costs, etc., and they can't find investors willing to take the loans on.
Your best bet might be a credit union. They typically have more flexibility - shop around, though, because not all credit unions are as user-friendly as they used to be. Many have gotten into the secondary market game, and that'll mean no-go for a small loan. Another option might be a local-market bank that caters to "the little folk" - an old idiom that essentially means they're attentive to the needs of locals and not all about making millions off the backs of those who have not.
Your best bet might be a credit union. They typically have more flexibility - shop around, though, because not all credit unions are as user-friendly as they used to be. Many have gotten into the secondary market game, and that'll mean no-go for a small loan. Another option might be a local-market bank that caters to "the little folk" - an old idiom that essentially means they're attentive to the needs of locals and not all about making millions off the backs of those who have not.
Are there any banks Licensed in the state of Ohio that will loan 50,000 dollars or less does a lot of foreclosures I less than 50,000 dollars I live in though 44839 zip code North Central Ohio
Welcome alfie,
It will be quite difficult for you to qualify for a loan of $50,000 or less. Lenders normally don't lend such a small amount.
It will be quite difficult for you to qualify for a loan of $50,000 or less. Lenders normally don't lend such a small amount.
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