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Let's assume you meant purchase price because ther is no more 100% financing.
Your loan to value is determined by the lesser of purchase price or appraised value.
Purchase $200k
Appraised $210k
Loan to value determined by $200k
Purchase price $ 200k
Appraised value $190k
Loan to value determined by $190k
You see there is no benefit to having an appraisal over purchase price so the appraiser will make sure it is a very tight appraisal if it's over purchase price.
Yes, there is still 100% financing thru VA and USDA RD! With an RD loan you can borrow up to 100% of the appraised value. So if the appraised value is greater than the purchase price you can use the extra funds to pay closing costs. This program is more than 100% financing!
Let's assume you meant purchase price because ther is no more 100% financing.
Your loan to value is determined by the lesser of purchase price or appraised value.
Purchase $200k
Appraised $210k
Loan to value determined by $200k
Purchase price $ 200k
Appraised value $190k
Loan to value determined by $190k
You see there is no benefit to having an appraisal over purchase price so the appraiser will make sure it is a very tight appraisal if it's over purchase price.
Yes, there is still 100% financing thru VA and USDA RD! With an RD loan you can borrow up to 100% of the appraised value. So if the appraised value is greater than the purchase price you can use the extra funds to pay closing costs. This program is more than 100% financing!
How does this work? Do we simply ask the bank to take closing cost money from the difference? I am a bit confused on how the whole transaction takes place on closing day but I seem to remember from other posts that there was a specific order to everything so that things changed hands in a particular way. Thanks.
How does this work? Do we simply ask the bank to take closing cost money from the difference? I am a bit confused on how the whole transaction takes place on closing day but I seem to remember from other posts that there was a specific order to everything so that things changed hands in a particular way. Thanks.
VA is only for Vets and USDA is if you are in a rural area (and I thought they were out of money, but i could be wrong)
Is it that the value of the difference between the higher appraisal and the loan amount can only be applied to closing costs if you have a VA or USDA loan?
When TexDav said: "I would think it could if the value is more than you paid. Might increase insurance and tax rates" and you (AndrewSoss) said "nope", did you mean it wouldnt increase insurance and tax rates? Or that the difference couldnt be used for closing costs? Thanks.
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