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I'll be looking into moving out of state to a much more affordable area and purchase a small home there. The homes where I wish to purchase are inexpensive. I've heard it's impossible or extremely difficult to acquire a mortgage for under $50,000 because lenders don't wish to bother with smaller mortgages. If I buy a home for $50,000 to $60,000 and put $20,000 down, will I be able to get a conventional loan for $20,000 - $30,000? If not, what options would I have?
I'll be looking into moving out of state to a much more affordable area and purchase a small home there. The homes where I wish to purchase are inexpensive. I've heard it's impossible or extremely difficult to acquire a mortgage for under $50,000 because lenders don't wish to bother with smaller mortgages. If I buy a home for $50,000 to $60,000 and put $20,000 down, will I be able to get a conventional loan for $20,000 - $30,000? If not, what options would I have?
There are lenders who will give mortgages for under $50K, some won't but keep asking until you find one. But if you are putting so much down I would maybe put 20% down and then pay another 15K after closing towards principal because some might not want to do a $30K mortgage or less. Or you might get a 15 year mortgage instead of putting so much down and you can pay most mortgages off early without a penalty.
If you are looking for places where homes are $50K it will be easier to find lenders who do loans for that amount.
Some lenders will do above $25K mortgage. I went to a first time homeowners course and one speaker was a mortgage lender of a bank and he did say they don't have a minimum per se, but don't come to him for a $10,000 loan, he was actually really funny, more of a stand up comedian then a banker.
I had one mortgage broker who worked with investors and her minimum was $53K. Caliber Home loans in my area said they would do above $25K, and you can't find any home under $100K in this area unless it's a condo. I think Caliber may be national.
The biggest option you have is to shop around for a lender.
If your bank won't or can't work with you, try another bank.
Better yet, try a local Credit Union. It is a pretty safe bet they will be glad to loan you whatever amount you need, in some form of loan or another. Just make sure that the real estate is listed on the loan documents as collateral for the loan, even if the loan is not a "traditional mortgage". That way, the interest will probably be tax deductible!
Keep in mind that if it is a non-mortgage loan, the taxes and insurance may be up to you to pay instead of being in an escrow account tied to the loan.
Financial advice is like legal advice; talk to someone locally who you can trust. An internet forum is no place to find competent advice. Can you imagine standing in a court room telling the Judge that "Well, the people on the City-Data.com real Estate/Mortgage forum said I could do this, and I believed them! I had no idea it wasn't legal!"
Yeah, that will work, you bet!
I'll be looking into moving out of state to a much more affordable area and purchase a small home there. The homes where I wish to purchase are inexpensive. I've heard it's impossible or extremely difficult to acquire a mortgage for under $50,000 because lenders don't wish to bother with smaller mortgages. If I buy a home for $50,000 to $60,000 and put $20,000 down, will I be able to get a conventional loan for $20,000 - $30,000? If not, what options would I have?
I know getting a small home loan is tougher but not impossible. Keep searching for a broker or bank. Someone is gonna want your 20k and take loan payments.
If you just got out can't find anyone at all
Get a personal loan. Go in all cash. You can't deduct that loan interest as it's considered a personal loan (I think you used to be able to but I don't think it's allowed anymore I'm sure a loan guy will set this straight)
Then once you bought the house, get a home equity loan pull out 80% equity and now you got a bunch of cash back and a payment you can deduct the interest on. And you're not paying PMI. I'm assuming you qualify to make the payment have a steady job. Just don't get stupid with the money you got by wasting it. Put it in some interest bearing account. Use the money to pay the loan. Eventually the payment will have to come frm you but it will be a while. Start saving YOUR money and investing that.
The biggest option you have is to shop around for a lender.
If your bank won't or can't work with you, try another bank.
Better yet, try a local Credit Union. It is a pretty safe bet they will be glad to loan you whatever amount you need, in some form of loan or another. Just make sure that the real estate is listed on the loan documents as collateral for the loan, even if the loan is not a "traditional mortgage". That way, the interest will probably be tax deductible!
Keep in mind that if it is a non-mortgage loan, the taxes and insurance may be up to you to pay instead of being in an escrow account tied to the loan.
Financial advice is like legal advice; talk to someone locally who you can trust. An internet forum is no place to find competent advice. Can you imagine standing in a court room telling the Judge that "Well, the people on the City-Data.com real Estate/Mortgage forum said I could do this, and I believed them! I had no idea it wasn't legal!"
Yeah, that will work, you bet!
I think this is a great place to get advice because he seems to not even know where to start or who or what to ask for. People and banks with interest in getting your money will tell you what you want to hear. this place offers free advice and there is not incentive for anyone to fatten their wallet.
If the prices in your area are typically in that price point, the local banks there are probably used to doing smaller mortgages. What you need to realize is that you probably will not receive the interest rates you see advertised all over online. Smaller mortgages cost more because they aren't making very much money on you, so they make up for it in the interest rate.
I'll be looking into moving out of state to a much more affordable area and purchase a small home there. The homes where I wish to purchase are inexpensive. I've heard it's impossible or extremely difficult to acquire a mortgage for under $50,000 because lenders don't wish to bother with smaller mortgages. If I buy a home for $50,000 to $60,000 and put $20,000 down, will I be able to get a conventional loan for $20,000 - $30,000? If not, what options would I have?
Hi, most lenders have a minimum, but you should be fine. What you want to look out for are lenders that charge a higher rate for the low loan almost (they can do this legally, it's the cost of doing the loan). A nonprofit, such as a credit union is your best bet. Most credit unions do not have Loan Level Price Adjustments (LLPA's), your best bet for a better rate. Now if you are trying to go manufactured (trailer put on permanent foundation), that should be the first words out of your mouth, followed by the loan amount.
My outstanding loan balance is around $80k, as prices in my area are pretty low, also. When I did my refinance, I asked my credit union what the cutoff was for a small loan (often called a "baby" or "junior" loan). They didn't have one. So not only will they do mortgages for smaller amounts, they don't charge a premium on the interest for small loans, like many lenders do.
So I second the idea of checking with a couple local credit unions.
My home loan was for $47,000. We didn't have any problems getting a loan.
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