Home Buying in 21740>Question Details

Mattacl, Home Buyer in 21740

Can mortgage be higher than list but less than appraisal?

Asked by Mattacl, 21740 Sun Aug 22, 2010

I'm looking at a REO list for 88k the online appraisal is around 120k can a mortgage be greater than the list but less than value to cover taxes closing costs. I wasn't planning on buying for another year to save. I've just got my credit cleaned up and paid off this month I have one credit card that needs to report zero but even with last months balance Transunion is a 708 Equifax is 716 from myfico. I haven't really set aside anything for buying yet; everything went toward debt. The house has all of the qualities I want in a home. It was a rental before foreclosure and the photos don't show any vandalism from the foreclosure process. Any thoughts?

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Jessica Hood & Laura Roskelly’s answer
Yes, you can finance up to the appraised value of the home. However, you would have to have contractual seller contributions to have the closing expenses covered. They can't be part of your loan in any traditional program I'm aware of.
0 votes Thank Flag Link Tue Jul 24, 2012
Mortgages are based on the lower of the sale price or appraised value. The asking price has nothing to do with the mortgage.
You can offer more than the asking price, as long as the property will appraise. Build in Seller Contribution to be applied to your closing cost. On FHA and USDA loans you can get up to 6% of the sales price applied towards your closing cost. In most instances, you can get in for little or no money. These are legitimate mortgage programs , designed for low to moderate income families.
Add 4% to the Asking price and ask for 6% Seller Contribution. Be careful not to ask for too much, because you can only apply real cost , don't leave money on the table. A good Lender can calculate how much money you will need to get from the Seller. gmakrides@ihmcloans.com
0 votes Thank Flag Link Tue Dec 1, 2015
Yes, the mortgage amount can be higher then the list price as long as it doesn't exceed the actual appraised value of the home. Depending on condition of property there are many local and state down payment assistance programs available that could be used in conjunction with CDA or FHA loans. Some of the grant programs will contribute up to $3500 or $5000 towards your down payment and the seller (in this case the REO Bank) could still contribute towards your closing cost.
0 votes Thank Flag Link Tue Aug 24, 2010
Hi Matacci,

Generally yes. Much will depend on your loan type and lender restrictions. But in many cases you can negotiate for the Seller to pay your closing costs. You would only need your downpayment.
0 votes Thank Flag Link Mon Aug 23, 2010
Sometimes your closing costs can be added to you mortgage, but also you can make an offer on the property and ask the seller to cover your closing costs, yes even on an REO. However you will probably need the 3.5 % for you down payment. There a lot of communities with downpayment assistance programs available, consult a local bank or two and ask them about any home buying assistance available through the city, county or state. Ask a couple different lenders and local banks.
Good luck
0 votes Thank Flag Link Mon Aug 23, 2010
There are some programs that allow you to finance your closing cost as long at the appraisal is high enough to cover them. The best thing to do is to contact some local reputable finance institutions to find out which programs you may qualify for. If you need assistance with some institutions that you may be able to contact, feel free to give me a call, and I can get you pointed in the right direction. You can call me at 888-762-1554 or email at james.stoneham@remax.net
0 votes Thank Flag Link Mon Aug 23, 2010
The closing costs can be added to the top of the purchase price as long as the home appraises for the total amount. However, in most loan programs, you do have to come up with your down payment. A VA loan does not have a downpayment and USDA loans do not have downpayments . However, USDA may be changing in the future.
0 votes Thank Flag Link Mon Aug 23, 2010
Hello, the mortgage amount can't be greater than the purchase price. If you haven't set a side anything for buying, I would keep 3.5% for the down payment and another 3% for closing cost in case the seller wont pay. What I would do is save the money then start looking for homes. It doesn't make sense to look now when you can't buy.

Congrats on cleaning up your credit though. You are on the right track.

Sameer Punjani
0 votes Thank Flag Link Mon Aug 23, 2010
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