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Im being told that my new home im planning on buying has an estimated appraisal value around 450k... this is a turn key modular home build and im only paying 320k (for the land, land work, septic, well, and modular home)... How is this a problem and why cant I get the loan?
I'm being told that:
Quote:
Originally Posted by Real Estate Agent
Not sure if you spoke with (the finance guy) yet, but I think the issue with a high appraised value is that it’ll require a larger down payment on your end. FHA is 96.5% LTV, so an appraised value of $450K results in a loan amount of $434,250. Then factor in that the max FHA loan amount is $305K’ish and you're left with sizable down payment that’s needed to bridge that gap. At least that’s what I understand the problem to be. Again, (the finance guy) can confirm this.
I still don't understand this problem though. If I'm only paying 320ish and put 15k down and we sign the contract stating this, how would a high appraised value matter if the bank isn't loaning me the appraised value, they're only loaning me the 305k. wouldn't a higher appraised value mean they are taking on less risk of losing out if I were to default on the loan? I know on the other end of the spectrum (lower appraised value then contract price) it causes problems.
Quote:
Originally Posted by Real Estate Agent
I agree with you, but think it’s a LTV thing. Let me know what (the finance guy) says.
Who says its a problem? Your realtor? Frankly they sound surprisingly uneducated about this. Why would they assume your loan amount changes based on the higher appraisal?
I would just talk to your loan officer. Nothing should change. In fact you should be able to get better financing as your only asking for roughly 75% of the value. I would ask if this opens up any financing options.
Have you talked to the the finance guy yet? It does sound like the agent is confused (which is problematic that they might not understand something that seems pretty basic) but it would be best to talk directly to the finance person so you know exactly what the issue is, if there really is an issue.
Im being told that my new home im planning on buying has an estimated appraisal value around 450k... this is a turn key modular home build and im only paying 320k (for the land, land work, septic, well, and modular home)... How is this a problem and why cant I get the loan?
I'm being told that:
I still don't understand this problem though. If I'm only paying 320ish and put 15k down and we sign the contract stating this, how would a high appraised value matter if the bank isn't loaning me the appraised value, they're only loaning me the 305k. wouldn't a higher appraised value mean they are taking on less risk of losing out if I were to default on the loan? I know on the other end of the spectrum (lower appraised value then contract price) it causes problems.
uhh, thats NOT a problem; you've won the lottery!
305k loan on a 450k house is like 30% instant equity
; you can tell FHA to F.O. and INSTEAD go with a CONVENTIONAL loan !
(and SAVE PMI, and maybe even get cash OUT on the deal !!)
only issue that MIGHT be lurking (not enough info give) is IF the proportional value of the LAND portion of the property is TOO HIGH vs the improvement; ie , if the LAND appraised $350k and the modular $100k ; gonna make it tough - I think banks want land to be 20% or less on Residential Mortgages.
Last edited by oldoak2000; 06-16-2017 at 02:43 PM..
Reason: land proportion
Ok talked with both today. Loan officer says it only may raise a red flag in under writing because they may think the house is deflated due to it being in bad condition or shape. Being a new build he feels like it will be no trouble at all. At worse the under writers may request a second appraisal.
We are looking at 50k for land, 50-70k for land work, basement, septic and we'll then 200k for the home.
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