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How to finance this property.

Asking Price - 53.5K

Primary residence condo and State is IL and Cook County.
Credit - 735-740 FICO, clean history

How can I finance this property on conventional mortgage. Are loans at 50K possible.
I can make 20 or 30% downpayment easily.

If I bid 55K and ask for 3% closing cost, Can we do a 90-10 loan.
Many banks have 50K limit on new purchases.

Another option,
would any bank give personal loan to buy and then do refinance.

Are there any private mortgage options, without upfront points and low rates.




  • September 01 2013 - Chicago
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Answers (6)

Profile picture for user6940917
Talked to Cap One.
They said they can. I am still skeptical.
  • September 01 2013
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Profile picture for Matt Laricy
I know of lenders that can do this as well.
  • September 01 2013
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I know we can do this loan as well.  Lots of lenders don't want this loan because they feel there is not enough money it it.  The risk is that your loan may end up being considered "high cost" due to the closing costs being a fixed amount.  

On a $100,000 loan $3000 in closing costs are 3% of the loan.
On a $50,000 loan the same $3000 is 6% of the loan.  This could be the issue some lenders have.

Hope this helps.
  • September 01 2013
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Profile picture for user6940917
Cap one gave this quote.

Loan Amt - 42,800
20% down.
3.5% 15 years

3,800 closing cost (lender fee, appraisal, credit report, flood cert, etc)
includes 1100 title insurance.
Seller pays for this.
1000$ promo if the loan is applied before sep 15th.

Final closing cost excluding lender insurance - $1700

It looks like good deal.
Would be nice to have anaother lender as back up.

Does this look fine.
Are there other banks that can offer a sub $2000 closing cost.
  • September 01 2013
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The loan size will be the ultimate problem and could kick it into a High Cost loan. Your numbers/offer/bid must have changed because 20% down on a 55K purchase is a loan amount of 44K. Also...

Seller pays for what part of the 3,800 closing costs? Title? Yes, sellers typically pay for the owners title policy in IL, but you are still obligated to pay for title costs associated with your loan/lender. You also have other closing costs associated with the loan, such as lender direct costs, appraisal, credit and a few small items.

You mention that you have made the offer asking for 3% from the Seller towards closing costs. 3% on a purchase price of 55K is only 1,650.

And, if you are offered 1K as a promo incentive, please check the fine print carefully. If all is good with the promo, go for it!


  • September 03 2013
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I wrote something today about High Cost Loans here:
http://cgbarbeau.blogspot.com/2013/09/bank-refuses-to-close-my-dinky-home-loan.html

It explains in detail the Catch 22 that Dodd Frank's HPML rule creates for mortgage lenders.

If you lock and anything changes they get stuck.

Suggestions: Don't do this online. Find a local lender you can sit down with. Get in writing from seller's title/escrow/attorney all their fees before you start. Don't change your application, don't drag it out long, keep your FICO score high- changes can trigger this problem.
  • September 03 2013
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