Lets say I were to purchase a house valued at $100,000. I was offered a good deal to purchase at $80,000. Would the bank lend $80,000 and require no down payment? (This would be in a scenario where the bank would normally require 20% down.)
I am interesting in buying my first SFH rental property, I have good credit but I am only 23 years old and do not have a lot of cash.
Normally the bank is still going to require 20% from you (if 20% is their normal policy) no matter what the purchase price is. This is because if you have 16k invested in an 80k house, you’re much less likely to walk away from it when times get tough because you’ll lose your money. If you have nothing in the deal, all you risk is your credit.
Ok. You answered it. Thanks. :beer
To build on this scenario:
Lets assume that I pick up a property for 50K, put in 30K, and it now has an appraised value of 100K. Will a bank do a long term loan for 80K and cash me out on this property?
See the other recent post in this thread about refis.
Cash out refis are VERY tough to get. Alot of people blame cash out refis for getting us in this mess.