Quote:
On 2005-10-18 10:18, 322houses wrote:
The 80/20 loan that you may obtain will be off of the sales price and not the appraised value. End of story.
Not if the appraisal comes in lower than the sales price. Kittiwulfi gave the correct answer – whichever is less.
"Cash out to buyer at (purchase) closing is mortgage fraud. " THAT STATEMENT IS ONLY TRUE IF FRAUD WAS COMMITTED TO GET IT. It is up to a lender if he will let a buyer receive funds at closing. The main thing is the type of financing, more government involved equal more rules. If cash out financing were not allowed the whole real estate investment field would start a downward spiral quickly.
I just closed on a duplex which was financed at 100% LTV using an 80/20 program. The appraisal was higher than the purchase price. so off course the 80/20 was based on the purchase price.
If the appraisal is lower than the sale price, the bank will only finance the lower amount which means that it is not an 80/20 loan since you might have to bring in the difference between the appraisal and the purchase price.
So technically, the bank will finance an 80/20 deal based on the sale price as long as it is equal to or better than the appraised value ( not necessary which ever is less)
Quote:
On 2005-11-01 21:39, vguess99 wrote:
I just closed on a duplex which was financed at 100% LTV using an 80/20 program. The appraisal was higher than the purchase price. so off course the 80/20 was based on the purchase price.
If the appraisal is lower than the sale price, the bank will only finance the lower amount which means ...
which means:
The lender finances whatever LTV the loan program allows from purchase price OR appraised value ... whichever is less
whichever is less (appraised value or the sale price)
[ Edited by kittiwulfi on Date 10/11/2005 ]
If it appraises higher than the price then you can refinance and pay rehab costs or put cash in pocket or pay closing fees.
Ed
Cash out to buyer at (purchase) closing is mortgage fraud.
When should he refinance? The same day, right after purchase money financing?
The 80/20 loan that you may obtain will be off of the sales price and not the appraised value. End of story.
Quote:
On 2005-10-18 10:18, 322houses wrote:
The 80/20 loan that you may obtain will be off of the sales price and not the appraised value. End of story.
Not if the appraisal comes in lower than the sales price. Kittiwulfi gave the correct answer – whichever is less.
"Cash out to buyer at (purchase) closing is mortgage fraud. " THAT STATEMENT IS ONLY TRUE IF FRAUD WAS COMMITTED TO GET IT. It is up to a lender if he will let a buyer receive funds at closing. The main thing is the type of financing, more government involved equal more rules. If cash out financing were not allowed the whole real estate investment field would start a downward spiral quickly.
in that case the lender would finance a higher LTV ... so that the buyer would bring less cash to closing
I just closed on a duplex which was financed at 100% LTV using an 80/20 program. The appraisal was higher than the purchase price. so off course the 80/20 was based on the purchase price.
If the appraisal is lower than the sale price, the bank will only finance the lower amount which means that it is not an 80/20 loan since you might have to bring in the difference between the appraisal and the purchase price.
So technically, the bank will finance an 80/20 deal based on the sale price as long as it is equal to or better than the appraised value ( not necessary which ever is less)
Quote:
On 2005-11-01 21:39, vguess99 wrote:
I just closed on a duplex which was financed at 100% LTV using an 80/20 program. The appraisal was higher than the purchase price. so off course the 80/20 was based on the purchase price.
If the appraisal is lower than the sale price, the bank will only finance the lower amount which means ...
which means:
The lender finances whatever LTV the loan program allows from purchase price OR appraised value ... whichever is less