Banks only want to loan above $50 000

FarmboyBill · #1 07/02/13, 01:40 PM

Im finding that out. Place im looking at is for $52. Bank will pay either 80% or 90% on the loan wanted. BUT Both those are below the $50 000 they will loan on. Whats your thoughts?

MY Banker said that THEY had that rule, but she didn't see why it had to be wrote in granite. I don't know whether that means it can be adjusted for a long time member of the bank,. OR ital. be her way out when I go to see her about getting the loan.

Course, IF the place appraised for say, 60 000, THEN there part would be above $50 000, AND I could get enough over the purchase price for the closing costs.

FarmboyBill · #2 07/02/13, 01:41 PM

Course, theres already a contract on the place, but the owners don't think the people will find the money.
OF COURSE THEY WILL, when it starts to look like Ill be able to get the money for it.

Harry Chickpea · #3 07/02/13, 01:58 PM

I don't have a particular problem with that requirement. There are costs involved in generating, holding, and servicing a loan, and a property valued less than $50K has less security than one over that amount. Since you are close to that limit, it is probably not a deal stopper anyway.

Wolf mom · #4 07/02/13, 02:06 PM

Yuppers- I tried to refinance and the bank (Wells Fargo) said to take money out to make the loan above $50,000.

In another thread, you said you wanted to finance some of your remodel. If you fold that into your first mortgage, that could bring it above 50,000.

Don't play roulette with the banker - she could be getting $$ for every loan she makes. Of course she knows if they'll lend under 50,000. Then it'd be your luck that it'd get all the way to underwriting after you've given your life's blood in paperwork only to have them say no - it's under 50,000. A waste of everyone's time.

Whatever the property appraises for has nothing to do with the 50,000 you want to borrow - unless it appraises less than 50,000.

Keep it simple, Bill.

FarmboyBill · #5 07/02/13, 03:33 PM

Mom, Somebody beat me to that place, AGAIN. This place dosent have a house. The bank wouldn't make a 80/90% loan on it IF it did. only reason I can guess that they do is cause, with a buyer having to come up with a place to live quickly, IF the banks didn't go high on the % they would loan on property without a house, Few people could buy them.

K-9 · #6 07/02/13, 03:59 PM

FarmboyBIll, if there is a Farm Credit Services in your area, they love to loan on raw land and have great rates, I just borrowed less than 50 from them so they will make those loans as well.

Fire-Man · #7 07/02/13, 05:40 PM

I have not needed to borrow any money in a few years, but when I did, I always used my credit cards. I have bought a motor home, a right new truck, a woodmizer saw mill, tractor, etc, etc and always bought them with credit cards. I have not made a loan with "bank" since in the late 1980's. Do not eveen know if the credit card would work now. I still got them with 0 balance, I know I could get over $50,000 just using 2 of them, but when I was using the credit cards they would send me checks with 2.9%/3.9% fixed loans-----a lot cheaper than I could have borrowed the money from a regular loan/bank etc. Does this still work? I think The highest I ever had a fixed rate was 3.9% on my CC.

FarmboyBill · #8 07/02/13, 06:32 PM

I talked to them 4 months ago, along with another like place. One said they didn't loan on less than 40 acres The other one said they wouldn't loan on less than 150 000

FarmboyBill · #9 07/02/13, 06:33 PM

Never heard of borrowing off of a CC

joseph97297 · #10 07/02/13, 06:42 PM

If it is raw land, seems as if banks hesitate a little. Our little piece of land in MO (25 acres) was listed for 32,000. We were going to put 8,000 down and the first bank we went to wouldn't do it.

Had to go to a small local bank and they gladly jumped at it. Just seems like the big banks are working with a different set of rules.

So be it. Rather support the little guy (in our case, our loan agent was the President of the Bank that him and his dad owned, Alton MO.)

FarmboyBill · #11 07/02/13, 07:03 PM

I lived off of a hwy that wemt from W Planes to a T. To the right was Alton if I remember rightly. To the left was Thomasville. The gravel road I lived on came off the hwqy as a T. There had been a store ac ross the road/hwy from the G road. THAT gravel road went to Peace Valley, and ended up at another town that had 3ft high sidewalk on N side of town. Business bldgs. were all on that side also.
I worked for C Cola in W Plaines on PW Blvd.
BOY Im glad im gone from there.

Conhntr · #12 07/02/13, 07:07 PM

The big banks make loans that "conform" to standards. That way they can sell them to each other. If it doesnt meet those standards other banks wont buy it. If its a small local bank they can make exceptions becuase they wont be selling it anyway! My standard 30 year fixed that closed in april has been sold so far 3 times! Im waiting till they sell it back to the origional bank lol.

rod44 · #13 07/02/13, 07:39 PM

A point of clarification from a retired Real Estate Appraiser. The bank will only loan up to the purchase price of a property. If the appraisal is lower than the purchase price they will only then loan to the appraisal estimate of value. If the purchase price is say $50,000 the appraisal could be $100,000 and they would still only loan to the $50,000 figure.

As to not wanting to loan on less than $50,000. It costs the same to process and service a $50,000 loan as it does a $200,000 loan. It is probably just a "business decision" by the bank that they can't afford to do the smaller loans.

Vacant land loans typically have different loan standards than improved properties.

Hope this helps some.

Brighton · #14 07/02/13, 07:39 PM

Have you tried the USDA, they have rural development loans for lower income folks, seems you might qualify for that FarmBoy??

FarmboyBill · #15 07/02/13, 08:00 PM

Rod, My boy bought a house in town. He bought it for $52. It appraised for $72. He borrowed $55 to cover the closing costs.

gabbyraja · #16 07/02/13, 08:08 PM

http://www.fsa.usda.gov/FSA/newsRele...16_rel_02.html

Pony · #17 07/02/13, 08:12 PM

Quote:

Originally Posted by FarmboyBill

I lived off of a hwy that wemt from W Planes to a T. To the right was Alton if I remember rightly. To the left was Thomasville. The gravel road I lived on came off the hwqy as a T. There had been a store ac ross the road/hwy from the G road. THAT gravel road went to Peace Valley, and ended up at another town that had 3ft high sidewalk on N side of town. Business bldgs. were all on that side also.
I worked for C Cola in W Plaines on PW Blvd.
BOY Im glad im gone from there.

Alton is to the right (160), Thomasville to the left (90).

I drive that route a lot.

FarmboyBill · #18 07/02/13, 08:30 PM

IF youl notice, I said that. IF YOU WOULD, Would you take the gravel road I mentioned around 2 miles N. It comes to a curve to the left and goes down hill. There is/was a white sided house on the E side of the road right at that curve. Id like to know if its still there. If you do, thanks beforehand.

FarmboyBill · #19 07/02/13, 08:33 PM

Gabby, I read it. Its for the young, the socially abandoned, and the new start up. NOT for the old and retired.

**Shrek** · #20 07/02/13, 08:37 PM

undeveloped land in small parcels is going to be near impossible to get a loan on because if you default and the lender forecloses it's easier to sell it with property.

You said your planning on putting a mobile home on it. Maybe if you include the road house in the loan you will fall in the range to get the loan.

Also your age makes getting a loan harder because the lender will most likely figure you may kick the bucket before they make adequate interest income of you.

Just a few things I learned listening to cookout conversations and talking finance with my father when he bought some charter shares in a small town bank as part of his wealthy childhood friend's anchor buy in 40 years ago.