Zillow Advice: Mortgage - best choice for $40-50k loans http://www.zillow.com/advice-thread/best-choice-for-40-50k-loans/511140/ Zillow Advice | Zillow Real Estate get a signature loan, far ... http://www.zillow.com/advice-thread/best-choice-for-40-50k-loans/511140/ get a signature loan, far less expensive.&nbsp; Fri, 13 Sep 2013 14:55:00 GMT http://www.zillow.com/advice-thread/best-choice-for-40-50k-loans/511140/ 2013-09-13T14:55:00Z Whenever I am contacted by ... http://www.zillow.com/advice-thread/best-choice-for-40-50k-loans/511140/ Whenever I am contacted by a consumer looking for relatively low balance loan I encourage them to check with either a local credit union or a smaller regional bank.<br/><br/>The ability to sell on the secondary market is really not the primary issue.&nbsp; Most lenders do have minimum loan amounts...some as low as 25K; however, the bigger issue the the higher (proportionate) cost of closing the loan (for the consumer, not the bank).<br/><br/>Many fees associated with closing a loan are fixed...an appraisal for example.&nbsp; Underwriting, processing, etc. are other fixed costs (lending staff are paid the same whether the loan is 25K or 750K).&nbsp; The higher proportionate costs on smaller loans will trigger Section 32...the High Cost, Predatory Lending provision that mandates much more scrutiny by Regulators and Government.&nbsp; The ruling maximizes closing cost at 5% and anything that exceeds the 5% rule trigger additional compliance and guidelines.<br/><br/>As a result of Section 32 (a very good law, by the way...it makes absolutely no sense to pay outrageously high fees for a lower balance loan), most Mortgage Banks will not allow closing of Section 32 loans at all.<br/><br/>When talking with the credit union or bank, discuss if there is a way for you to obtain a loan as a line of credit or equity line (fixed), in lieu of the full blown mortgage.&nbsp; Doing so could greatly reduce your closing costs.<br/><br/>All my Best,<br/><br/>Deborah<br/>NMLS #279125<br/><br/>[Promotion deleted by Zillow moderator. Please see our Good Neighbor for posting guidelines] Fri, 13 Sep 2013 13:23:00 GMT http://www.zillow.com/advice-thread/best-choice-for-40-50k-loans/511140/ 2013-09-13T13:23:00Z Many banks and lenders will ... http://www.zillow.com/advice-thread/best-choice-for-40-50k-loans/511140/ Many banks and lenders will not deal with loans under $50K because they are hard to sell on the secondary market. &nbsp;I would find a local bank that keeps loans in house and inquire with them. &nbsp;Good Luck! Fri, 13 Sep 2013 13:03:00 GMT http://www.zillow.com/advice-thread/best-choice-for-40-50k-loans/511140/ 2013-09-13T13:03:00Z