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Financing in Ashwaubenon : Real Estate Advice

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Sat Aug 12, 2017
Kathy Burgreen answered:
As a retired realtor in the New York City area, I am knowledgeable with million dollar homes and financing. You need to see it from the lenders side. What you don't know is there are caps set for each county across the U.S. So the cap amounts vary. Example: the max amount allowed to lend with low interest rates is higher for the New York City area than it is for your area because the value of the average home in NYC is much higher.

You need to ask your lender what the max cap is for your county. Any home priced above the cap amount means the lender can charge higher interest rates to buyers. So even if your max cap was set at $1 million for example, the fact that you want to buy a home for $1.1 million means that home's under $1 million will be eligible for low interest rates in the 3's or 4's BUT as soon as you go over $1 million the interest rate changes to the 7's, 8's or higher. Look, lenders need to make a profit and this is their hidden secret to making a profit - charging you high interest rates. From my experience, my gut feeling is the max cap for your county is around $700K. How close am I?

Your 2017 tax returns have nothing to do with this. The only thing that will work is having a larger down payment. Any possibility you can have 20% down payment instead of 15%? With a 20% down, you have more power to negotiate a lower interest rate. Lenders will negotiate once the down payment is 20% or higher. It's basically proving to the lender that with a higher down payment, they are taking less risk.
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