Posted by TC on August 08, 2003 at 14:30:49:
I was just trying to make the point that in most lender’s viewpoints, you can’t have “equity” in a property you haven’t purchased yet. I just didn’t do a good job of it…
Can’t get loan with $200K in equity. What’s wrong? - Posted by Pleebo Jones
Posted by Pleebo Jones on August 07, 2003 at 22:54:25:
I live in Atlanta and found a property for sale at $198K. It has been independently appraised for $422K. I have been seeking a loan (with no income and no asset verification)for 60% LTV based on the equity in the property and my credit score of 604. I would almost settle for any terms if I could just get the money. What’s the problem here?
Re: Can’t get loan with $200K in equity. - Posted by Phillip Herrejon
Posted by Phillip Herrejon on October 06, 2003 at 01:52:03:
Most lenders do not lend on appraised value. They lend on contract value. Think of it from a bank stand point, would you lend $100K on a $100k that is selling in the market for $60K? Not going to happen. This used to be several years ago, but banks got burned left and right. They don’t do it this way anymore.
Seller gift the equity? - Posted by Mia
Posted by Mia on August 10, 2003 at 17:04:23:
Can you have the seller “gift” you the 200K equity so it looks like a down payment has been paid?
Re: Can’t get loan with $200K in equity. - Posted by Elizabeth (NJ)
Posted by Elizabeth (NJ) on August 10, 2003 at 15:17:21:
It’s a long stretch, but have you considered the probability of environmental issues that may be known to only a select few, including some of the lenders? It’s not uncommon for this kind of thing to happen. Just a thought.
Re: Something smells fishy - Posted by Fred
Posted by Fred on August 09, 2003 at 24:50:24:
Ask yourself why is he selling so much below FMV. Do your due diligence.
Re: Can’t get loan with $200K in equity. - Posted by TC
Posted by TC on August 08, 2003 at 12:24:39:
Is it a residential or a commercial property? I am in AL and know of several lenders who will do a stated on residential up to 95% with a CLTV of 100% and credit scores in your range, but you are seeking to purchase with 0 down, (the seller won’t hold a 2nd, right?) so technically there can’t be any equity, just a below appraisal acquisition. There are hard money lenders who can help you with such a deal…
Re: Seller gift the equity? - Posted by Pleebo Jones
Posted by Pleebo Jones on August 10, 2003 at 20:13:57:
Mia, people like you make this site worth visiting. This is a very excellent creative idea. Thanks.
Re: Can’t get loan with $200K in equity. - Posted by Pleebo Jones
Posted by Pleebo Jones on August 10, 2003 at 20:05:02:
In my experience, if there are environmental issues such as lead or toxic waste, lenders would tell yuou that they can’t do a loan for that reason or they can do a loan if the problem is fixed. Why the secret?
Re: Something smells fishy - Posted by Pleebo Jones
Posted by Pleebo Jones on August 09, 2003 at 12:53:40:
Nothing fishy. I have an independent appraiser value the property at $422K and estimate repairs at $30K. The county values the property at $325K. We all know that county values are always lower than market value.Roof and foundation are excellent. All of the repairs are interior work and fixtures. Comps in the area run from $380K to $500K. Home work done.
Re: Can’t get loan with $200K in equity. - Posted by Wayne IL
Posted by Wayne IL on August 17, 2003 at 09:59:51:
If the property is commercial, the lender will loan on the LOWER OF purchase price or appraised value.
Wayne IL
Re: Can’t get loan with $200K in equity. - Posted by Pleebo Jones
Posted by Pleebo Jones on August 08, 2003 at 14:19:37:
It’s a residential property and the owner will not take a second. I would like to do a 0 down financing. If the property is appriased at $422,000 and I am getting a loan for $275,000 or less, how can there be no equity? I am confused on this. Can you elaborate. Thanks
Re: Can’t get loan with $200K in equity. - Posted by yshNJ
Posted by yshNJ on August 08, 2003 at 13:29:34:
Hi TC,
I’m unclear on what you mean by the following.
>>but you are seeking to purchase with 0 down, (the seller won’t hold a 2nd, right?) so technically there can’t be any equity, just a below appraisal acquisition.
Specifically, I don’t understand the part about “there can’t be any equity”. I guess I’m trying to wrestle with the meaning of your statement. Wonder if you can help? Thanks much.