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I planning on buying a small house, about $20.000. Will any bank give me such a little mortgage? If no, what is the lowest price I could apply for a mortgage? Thank you.
Depends, at least a little, on why the place is so cheap...
I have seen, in all honesty, folks spend more than $20k on a garage. If the house is in area of unstable market conditions, is in far worse condition than most people wouod find acceptable, is constructed in a way that makes it unsellable or dangerous then no lender will take that as collateral.
Now if there are other homes that similarly low priced, in good condition, sellable you might find a smaller local lender willing to make a loan on it. Do not expect as low a rate as on larger mortgage, and be prepared for the lender to want very detailed appraisal. The loan would not be sellable on the secondary market so the lender has to be extra cautious...
The most popular loans start at $100k, but you can find lenders that have no issues doing loans at half that amount.
Of course on smaller mortgages the lender may want to explore the various government backed loans from FHA, VA,USDA-- smaller down payment is just one plus.
The lowest I've ever been able to get a lender to do is $50k, but the rate was significantly higher that the person could have had the same mortgage payment as a $75k property. You might have better luck getting a personal loan from a bank than a mortgage for $20k.
Thank you for the replies. I know it won't be a house of my dreams, it just has to be a temporary shelter when I feel like getting out of the big city once a while... I'll try with local lenders then but a personal loan would be a solution I guess.
I have a coworker who wanted to do something like this. She had paid off her primary home so she was going to do a line of credit/home equity loan to get her second home. If not a personal loan should work.
Kudos to you to going against the grain, most of the time folks want to buy a home as much as they are allowed to borrow. We qualified for $175k, we bought $108k.
Good luck!
My credit history is very good (about 850 points) so I'd get a good loan I guess but I've no wish to get myself into puting all my money into an expensive house. Thanks for another advice.
Relax. Assuming the house is valued above the sales price, you should have no problem getting a short-term mortgage - 10, 12, 15 years. A year ago we got 4.5% on less than $40K for 15 years. And we weren't "forced" to go govt backed mortgage either - it was never discussed although my husband was eligible for a VA loan.
Go to a local bank - local to where the property is located - and not a large national bank. If your credit is good, it should not be a problem. You can also check with unitedcountry.com - there's a link on their website for mortgage info.
Thank you for the reply. BTW can you tell me how high your rates were on this loan?
Quote:
Originally Posted by NY Annie
Assuming the house is valued above the sales price, you should have no problem getting a short-term mortgage - 10, 12, 15 years.
What is the best and quickest way to get the house vaule? I mean the value to be taxed. Let's say I am looking at a house at a real estate website and they are asking $25k, how do I know what amount will be taxed yearly / how do I know if the house is valued above or below the asking sales price?
And on what basis do local authorities estimate a house to tax the owner? Does this figure change when an owner changes?
I know these questions are not related to this topic but they came to my mind now.
Ditto ZenMaster. Also check out the land records. Many states have this information online. When you look up the property address on the tax roll, you can find out general condition (at time of assessment), approx tax value, amount of taxable value (then you get to multiply), and you can see the neighboring properties. Sometimes you also get to see the GIS map and some of them are in color. It gives you a great idea of the whole neighborhood from an aerial view.
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Depends, at least a little, on why the place is so cheap...
