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Can closing costs still be rolled in?

Can closing costs still be rolled into purchase mortgage loan amounts, if the purchase price is 20% less of appraised value? Or are all loans now based on % of loan to purchase price?
  • January 05 2009 - Indianapolis
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Answers (4)

5-7 years ago you could purchase a home based on the appraised value, but that has been gone for a while.  Any normal non-commercial note is going to base your down payment off the purchase price and not appraised amount.

I own some commercial property and have been able to purchase several of these with my down payment based on appraised value, but these have dried up with the financing pull back over the past year, and these only happen when you have a good relationship with a local banker that trusts you before you even ask for something such as this.  A few years back I was able to buy an 8 unit apartment building for $315k, it appraised for $405k, local bank required 20% down or "equity position" and they based it off appraised price, so I essentially walked away with $$$ in my pocket at closing after factoring in tax pro rations, tenant deposits, and pro-rated rent during month of closing. 
  • January 08 2009
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Your Loan to Value is calculated on purchase price not appraised value.
  • January 05 2009
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On a "purchase" transaction, LTV ( in most cases) is established from Purchase Price rather than Appraised Value or which ever is less.
  • January 05 2009
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Yes, but if you exceed the 80% loan to value then mortgage insurance will kick in.
  • January 05 2009
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