OfflineWhen getting a bank loan, do they give you approx. 80% of the appraised value of the house, or 80% of the price you are going to pay?
-TJR
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Question on Bank Loan
Posted on: Sun, 11/22/2009 - 20:37
When getting a bank loan, do they give you approx. 80% of the appraised value of the house, or 80% of the price you are going to pay?
-TJR
A typical loan is a percentage of purchase price. That is why if you know there is a ton of equity in your deal, it's nice to purchase with "cash" and then refi at the FMV, which would be 80% of a much higher number. This is what I am using as a system right now. The only trick is to get a lender that will do a no-seasoned refinance, meaning you don't have to hold the property in your name for a mandatory amount of time. However, if you plan to do improvements to the property, you can probably find a lender willing to lend based on ARV.
I might have made that sound more complicated than it is.. let me know if that makes sense..
Rina
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Rina,
Thank you, that makes sense. From your experience, would a credit union be easier to do a no-seasoned refi? Basically I would need to find a source of financing to initially purchase the property, find a bank that doesn't care about seasoning, and get a refi for ARV to pull out equity and pay back initial lender and repairs? If so, I understand. Thanks again for your help.
-TJR
Rina, Thanks 4 good info. I was considering paying all cash for a property I found.[super deal]
using my money and also relatives money to purchase,could I then refinance the home in my name with no credit or job income history?
Would a bank lend with that being said? Suggestions? Thank you.