could not purchase a property for $40,000, could they? Don't you have to have a FICO score of at least 520 for a lender to take a risk on you?
2007-03-08 06:30:44 · 17 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
it would be a VERY long shot. & would cost an arm & leg b/c you would probably have to go through a private lender.
2007-03-08 06:45:47 · answer #1 · answered by ricks 5 · 0⤊ 0⤋
If the property is appraised at $40,000 the person could almost certainly get a loan. It might be through a private lender. That person will charge a high interest rate and points to do the loan but there is alsways someone willing to lend if the price is right. Most likely it will be an interest only loan for 3-5 years which should enable the borrower to improve ther credit rating and then get a conventional loan.
There is little risk to the lender if you put down 25% as that would mean that the property would have to loose 25% of its value for them to loose money if the borrower defaults on the loan.
2007-03-08 14:43:36 · answer #2 · answered by Bryan H 3 · 0⤊ 0⤋
There are very few banks or lenders of any kind that will lend under a 500 score. And it's getting worse right now as subprime loans are defaulting in record numbers.
You have two main problems: 25% downpayment may not be enough with those credit scores. 30-35% might be closer to what's expected.
2nd problem: Your 25% downpayment is only $10,000. If you were to default, attorney fees alone would eat right through that $10K, and the bank would absolutely lose money if you defaulted, especially after interest accrual for 6-12 months, and selling costs, and the likelihood that they would NOT get full market value selling the property.
It's possible you could find a private investor, but even that would be extremely hard to find.
I'd give this deal maybe a 5-10% chance of getting done.
2007-03-08 14:44:27 · answer #3 · answered by Yanswersmonitorsarenazis 5 · 0⤊ 0⤋
The reason they could not get the loan was because 99.9% of lenders have a minumum loan amount of $40,000.
If this person was giving $10,000 as a down payment, they are under the minimum. If you are bringing 25% down on any property, you can basically throw credit out the window. All you need is to be alive to get a loan. Lenders love to be at low loan to values on properties.
2007-03-08 15:55:07 · answer #4 · answered by Anakin Skywalker 1 · 0⤊ 0⤋
In this situation you would need to go hard money loan. You have a decent down payment and there is no FICO requirement nor do youhave to prove income as far as I know. THe rate will be ugly and you will have to repay in 3 years. But if you get a loan this way now you can refinance the property in a year take cash out (if needed) and all the while cleaning up AND establishing your credit that way you can take a conventional loan out and have a Fannie Mae package ready to go.
2007-03-08 14:45:24 · answer #5 · answered by peapod_mommy 2 · 0⤊ 0⤋
There may be a lender out there who may be willing to risk it but my gut feeling is that NO- they wont allow it. Even if you had 1/2 the money. Reasoning behind that is that you are beyond a credit risk- you are a credit casualty. Best thing to do would be to pay bills on time for at least two years and then try again. in those two years do not accumulate any more bills or let any go to collections.
2007-03-08 14:33:57 · answer #6 · answered by glorymomof3 6 · 1⤊ 0⤋
It depends. If it is a HOME LOAN, they may be able to get it, with higher rates.
If its a "property" or undeveloped land (and wells and such dont count as "developed") then probably not. Someone with GREAT credit has a hard time gettng a land/property loan with 20-25% down because land doesn't sell the same as homes do.
2007-03-08 14:35:06 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Well there are company's out there that would lend to you with that much down payment, but the rate would be so high, really its not worth it. You might be able to start to fix your credit, ask the Broker or Agent that ran your credit to contact the credit company and see what you need to do to start fixing the problem, I am assuming you have several derogatory accounts pay them off. High balance accounts, if they are maxed out then pay them down. Always consult with an Agent or Loan Officer and find out what your options are. Hope this helps.
2007-03-08 15:12:26 · answer #8 · answered by Bobette O 1 · 0⤊ 0⤋
when your credit score is anything in the 400 you are off the face of the earth as we say. no one will lend you any money. your best best would to take the money you are goin to use for a down payment and pay off the stuff on your credit report.
2007-03-08 14:34:06 · answer #9 · answered by cmruffin1 2 · 1⤊ 0⤋
Very untrue. You need to find a lender that deals with high risk loans but they are out there.
2007-03-08 14:34:52 · answer #10 · answered by jallissa 2 · 0⤊ 1⤋