Posted on: 28th Mar, 2007 12:36 am
I’m buying my first house from my mother for $160,000 and the house is worth $260,000.
Will I still need 20% down to get a conventional loan or do they consider the equity in the home to be good enough?
Will I still need 20% down to get a conventional loan or do they consider the equity in the home to be good enough?
Welcome larry,
Equity is the difference between the fair market value of a property and the principle balance on the mortgage. I don't think the difference here is the equity. May be you are buying the home at a lower price. Or is there any debt against it?
Usually lenders require you to pay 20% down payment if you wish to avoid paying for the private mortgage insurance premiums on a monthly basis. But they are open to borrowers who can put down as low as 3% to 5% of the purchase price. Such borrowers will have to pay higher interest rate on their loan programs compared to those making a higher percentage of down payment.
Thanks,
James.
Equity is the difference between the fair market value of a property and the principle balance on the mortgage. I don't think the difference here is the equity. May be you are buying the home at a lower price. Or is there any debt against it?
Usually lenders require you to pay 20% down payment if you wish to avoid paying for the private mortgage insurance premiums on a monthly basis. But they are open to borrowers who can put down as low as 3% to 5% of the purchase price. Such borrowers will have to pay higher interest rate on their loan programs compared to those making a higher percentage of down payment.
Thanks,
James.
I'm a little confused because she has $100,000 in equity on the house and she wants us to have that with the home. does it work that way? how can I use this to benefit me in the loan process? sorry for not understanding.
Thanks,
Larry
Thanks,
Larry
Larry,
I found another answer to your query at http://www.mortgagefit.com/predeal/about6765.html . Just have a look.
I found another answer to your query at http://www.mortgagefit.com/predeal/about6765.html . Just have a look.