Why am I seeing "now is the time to buy" on just about every real estate agents sign, yet banks won't give loans for under $50k?

Asked by J34983, 34983 Sun Mar 11, 2012

The average working family could really benefit from a deal like this, but instead these houses are really only for sale to those with big lumps of cash laying around.
Now is the time to profit off your neighbors forclosure is more like it, I don't want to see another sign or newspaper article like this, misleading people into thinking theres a chance.

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Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Thu Mar 15, 2012
We can’t lend under $50,000 in my area because of a usury law that is supposed to protect the consumer. And it does I guess, not as it was intended but better than nothing. The problem in my state is the APR is too high if you have closing cost on the mortgage, so we are not allowed to make a loan.

There are only a couple of solutions I know of, use a HELOC or Home Equity loan that have little or no closing cost, or go to a finance company and get a personal loan secured by the house. Both of those methods would work in my area, hope it helps you solve your problem, good luck,
1 vote
Ron Thomas, Agent, Fresno, CA
Sun Mar 11, 2012
Why would you think that there is a direct correlation between the two:
A lot of people have identified that the market has started to go up; that $50,000 house will soon be $60,000.
But the Banks want to make money!
How much $$ is there in a $40,000 loan? With about the same interest rate?
Do you think that the Banks have YOUR best interest at heart?
And there is another side to it:
Almost all houses, that are priced under $50,000 need a lot of work; that $10,000 worth of work on a $50,000 house is 20% of the value. Whereas, that $10,000 on a $200,000 house is 5%!

I suggest you talk to a Realtor about your wants and needs. Maybe they can find a $60,000 house that doesn't need much work. Either that, or you shouldn't be buying for a while until you can afford the $60,000 house.

Good luck and may God bless
1 vote
Broker RMS R…, Agent, Port St Lucie, FL
Thu Oct 18, 2012
I closed a sale at $26,000 this year, a HUD home, Bank of America FHA 203K - home needed some repairs. It can be done. NOW IS THE TIME TO BUY!
0 votes
Alma Kee, Agent, Tampa, FL
Thu Mar 15, 2012
Did you try a credit union? Virtually any credit union will allow you to join so don't restrict your search to the one you belong to.

If you have sufficient income and verifiable credit history to justify a $40k mortgage, I would think your best bet is a credit union or small local bank.

Also if you have money in a 401K you may be able to pull money to buy the house. Contact your 401(k) Plan Administrator.

Lastly there are Hard Money Lenders (loan sharks) that may do the mortgage if you can find 50% to put down.
0 votes
J34983, Home Buyer, 34983
Tue Mar 13, 2012
This is not a $40,000 house with $10,000 of needed repairs. This is my parents estate, I have personally maintained it since 1988. It has a lot of new things, plus I wouldn't have to move, I know the neighborhood well, etc, etc, etc. I guess moving expenses and piece of mind are worth nothing. (yes to the banks I know it is worth nothing for those of you who just have to point out the obvious).
0 votes
Annette Law…, Agent, Palm Harbor, FL
Mon Mar 12, 2012
Even Warren says he would a a few 100 thousand homes if he could manage them.

Be aware, NOW IS THE TIME TO BUY is not synonymous with ALL ARE ABLE TO BUY.

For some banks the COST of granting a martage below $50,000 exceeds their profit profile. In essence, banks intend to make a profit and if your business doesn't smelll like profit, they don't want it. The attitude of the banks, however, does not mean REAL ESTATE is NOT the most secure place at this time, and in the foreseeeable future, to put your money.

Lets not overlook the reality that the cost incurred by a real estate professional to find a home at this price point for you to buy will wipe out any illusion of making a dime. You find yourself in a position where you are a cost center for everyone who works with you. It is important you understand this. There are many, many, many professionals who will work with you, but NOT if you are disrespecting their efforts. We real estate professionals understand this is the opportunity of a lifetime for many and will work tirelessly to make this a reality for folks just like you. There, however, are limits to our patience and willingness to spend our resources to achieve your dream.
Now, you have about 2 years to positoin yourself to purchase real estate at pennies on the dollar. Rather than allow the banks to create greater frustration for you, get a plan in place that will allow you to purchase. You should not need to finance through a big bank a mortgage of this small size.
Here's a biggy for you. Search the following words and phrases along with the word 'grant' and give those who appear in the results a call.
(Real estate, Zipcode grant), (mortgage real estate zip code grant) (first time homebuyer, zipcode) (first time homebuyer, zipcode, grant)
Visit the community website http://www.MyDunedin.com and read the artical on the front page regarding grants available for first time home buyers. Many of these also provide affordable housing grants. These are cumbersome money sources, but it makes 'NOW IS THE TIME TO BUY' a call you can respond to that will have great benefit to you and those important to you in the very near future. This choice has always been yours in regards to what you do next. I've provided you exceptional advise and resources, now it's up to you.

Annette Lawrence
ReMax Realtec Group
Palm Harbor, FL
727. 420. 4041
Web Reference:  http://www.MyDunedin.com
0 votes
Scott Godzyk, Agent, Manchester, NH
Sun Mar 11, 2012
In good times and bad, in the strongest or weakest of markets the one thing that always stays the same is the banks minimum amount for loans which is $50,000. Now all banks are not equal, the fact is many local banks and credit unions do not have minimums. It will clearly depend on your ability to get a mortgage based on your credit and financials.

The facts are now is the time buy. Inventory is down near 30% in some areas while sales are up 10-18%. prices have stabilized and are now going up in some areas. It wont be lon that interest rates will strat to rise with inflation. Banks are loaning money and have loosened some guidelines. That sure makes now the time to buy.
Web Reference:  http://www.ScottsellsNH.com
0 votes
Alan May, Agent, Evanston, IL
Sun Mar 11, 2012
Now is the time to buy. That's one thought, all by itself. It says nothing about whether or not you can afford to purchase the property. It's not misleading, nor does it make any statement about whether or not you can get a loan officer to return your call for a loan under $50,000.

I'm sorry you're having trouble finding a loan officer to assist you, but that doesn't change the fact that inventory is high, prices are low and interest rates are at an historic low.
0 votes
J34983, Home Buyer, 34983
Sun Mar 11, 2012
I'm sorry but I have contacted Lisa Forgony and, well to put it nicely she is very unprofessional. Very, very poor communication, in fact no communication. I gave her all of my personal information and never heard a word from her. I called several times and it was one excuse after another until I told her to just forget it.
0 votes
Christina Jo…, , 34983
Sun Mar 11, 2012
You have to look in unconventional places to find unconventional loans. Most home loans are going to be for at least $50k some banks won't even do them for under $100k. I suggest you find a good mortgage broker that works with a variety of lenders who may have the flexibility to finance smaller loans. Try calling Lisa Forgony with Mortgage Resources, her office is based out of North Palm Beach but she will travel 561-844-4755
0 votes
J34983, Home Buyer, 34983
Sun Mar 11, 2012
I have been approved for $70,000 to buy my parents estate home. My real estate agent and attorney have negotiated the price down to $39,000, now I can't get financing anymore, not for that amount. The house has been in the family for 25 years and it worth well more than 40k but the title holder is willing to sell it for cheap.
NOWS THE TIME TO BUY, NOWS THE TIME TO BUY....WELL ONLY IF YOU'RE AN INVESTOR AND WANT TO ADD IT TO THE LIST OF HOMES YOU'VE ALREADY COLLECTED. Screw the average person, f 'em, the banks need money. But we'll advertise the BS.
0 votes
Danielle Sha…, Agent, Cape Coral, FL
Sun Mar 11, 2012
I do have a lender that can help. Jim Marcinkowski at Inlanta Mortgage 239.936.4232
0 votes
Alma Kee, Agent, Tampa, FL
Sun Mar 11, 2012
Try a credit union or a small bank. Otherwise a larger bank will do the mortgage but you will pay a high interest rate and/or lender related fees.

If you are a first time homebuyer, you may be able to get up to $7,500 from the State of FL Bond program, see if your income, household size and 620 credit score will qualify you here:


Then select a lender on the list and see if they'll spend time doing a $50k mortgage.

All the best,
Alma Kee
0 votes
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