Home Buying in Massillon>Question Details

A, Home Buyer in Ohio

I am being told by my real estate agent and financial guy that a $30,000 loan minimum is required. But...

Asked by A, Ohio Thu Aug 21, 2008

but I have friends and family telling me to watch out. I have found one property a few monthes back I liked and it was lower than 30 so they told me that I need to keep in mind that the places they are going through to get the loan require a 30,000 minimum. Family and friends that have purchased homes are telling me to watch because that may or may not be true. They may only use certain places because they reap certain financial gains from it. Is that a true possibility? I have found another 29,000 home that I know will need work but am willing to do it and I fear I will get the same answer from them. I am thinking of letting them know perhaps we are not a good match and I need to find another team to help me find my future home. Any feedback is very welcome

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Answers

3
You are dealing with two different issues here:

Issue 1: The loan amount. Often times the minimums are set by lenders because of the risk of a loan being classified as a "High Cost" loan. In other words, certain fees are a FIxed Cost (such as an appraisal at about $275). When you add all of the costs up, it calculates as a higher than acceptable percentage, since some of those costs are the same regardless of the loan amount.

Issue 2: Property Condition. Even if you are approved for a loan, the property may not be an "acceptable asset" to lend on. Many lenders require the home to be "safe and functional", but outdated is ok. If you are dealing with a home that needs work, you can get an FHA 203 (k) Rehab loan which solves this. This would allow you to purchase and include all of the rehab in one loan (but it must be completed by a contractor).

There are Community Loan Programs which certain banks must offer which may allow for the lower loan amounts, as well as possibly credit unions.

If you have any more questions or want to discuss, feel free to call me.

Franz Bauer
Loan Officer
American Midwest Mortgage Corp.
fbauer@ammcorp.net
440-320-5959
0 votes Thank Flag Link Mon Feb 8, 2010
Oftentimes, there are minimums that Mortgage brokers are working with. It may also be an option to check with your bank to see what other options are available.

Let me know if you would like me to have some brokers do some digging around for you.
0 votes Thank Flag Link Thu Aug 21, 2008
While there are some mortage brokers that have a minimum trhere are many that do not, and yes the answer is that there isn't enough money in it for them. However there are many that will work as hard for you for a $29000 loan as they would for a $100,000 loan. Also if you are a first time buyer there are prograns for grants and loans for helping rehab and bring a property up to livable conditions. Check around and get more opinions. Don't be afraid to call and ask for information.
0 votes Thank Flag Link Thu Aug 21, 2008
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