You can purchase a home with as little as 0% if you are a Veteran or if you are purchasing a home in a rural area.
Otherwise, you can purchase a loan with as low as 3.5% down up to a loan size of $271,050.
Your loan amount is always based on the the lower of purchase price or appraised value. So, if you purchase a home for $175,000 and it appraises for $190,000, the loan is still based on the purchase price which is the lower of the two figures.
If the home were to appraise for $165,000, the loan would be based on the $165,000 appraised value since it is lower than the purchase price. In this case your option would be to renegotiate the price with the seller, walk away from the purchase or pay the difference in cash.
Feel free to contact me with any other mortgage questions.
The Private Mortgage Group