LTV with no money down??

10 Replies

If a commercial property is appraised for more than $800K but the sale price is $600K for me will the bank finance $600K?

Thanks

Probably not, Banks want to see you have "Skin in the game" as they call it. So they are going to want you to put hard money down. That doesn't mean it has to be your money,

Originally posted by @Chris Adams :

Probably not, Banks want to see you have "Skin in the game" as they call it. So they are going to want you to put hard money down. That doesn't mean it has to be your money,

If the property is worth $800,000 he has $200,000 equity as "skin in the game".

The banks won't see it that way. They see an investor that has no money down, and no risk if he walks away.

Originally posted by @Chris Adams :

The banks won't see it that way. They see an investor that has no money down, and no risk if he walks away.

He's walking away from $200,000.  He's risking that amount if he defaults on the $600,000 mortgage.

@Bob Bowling Im not arguing that point. And I completely feel the same way. But I know what banks say and how they look at things.

Now its highly likely that at some point down the road he might be able to refi out his down payment. But I just can't see OP getting a no money down loan for $600k unless he has substantial holding to pledge, or a phenomenal relationship with the bank.

Originally posted by @Chris Adams :

@Bob Bowling Im not arguing that point. And I completely feel the same way. But I know what banks say and how they look at things.

Now its highly likely that at some point down the road he might be able to refi out his down payment. But I just can't see OP getting a no money down loan for $600k unless he has substantial holding to pledge, or a phenomenal relationship with the bank.

Um, what would be the LTV if the bank gave him $600,000? See how you are trying to make over $200,000 in value disappear?

Originally posted by @Bob Bowling:
Originally posted by @Chris Adams:

@Bob Bowling Im not arguing that point. And I completely feel the same way. But I know what banks say and how they look at things.

Now its highly likely that at some point down the road he might be able to refi out his down payment. But I just can't see OP getting a no money down loan for $600k unless he has substantial holding to pledge, or a phenomenal relationship with the bank.

Um, what would be the LTV if the bank gave him $600,000? See how you are trying to make over $200,000 in value disappear?

 The bank will loan on the lesser of the appraised value or the purchase price 99% of the time.  It doesn't matter if it appraises for $1,000,000 the bank guidelines don't let them base their loan on the $1,000,000 if they are buying for $600,000. Plus it is not an appraisal they ordered. 

Originally posted by @Mark Ferguson:
Originally posted by @Bob Bowling:
Originally posted by @Chris Adams:

@Bob Bowling Im not arguing that point. And I completely feel the same way. But I know what banks say and how they look at things.

Now its highly likely that at some point down the road he might be able to refi out his down payment. But I just can't see OP getting a no money down loan for $600k unless he has substantial holding to pledge, or a phenomenal relationship with the bank.

Um, what would be the LTV if the bank gave him $600,000? See how you are trying to make over $200,000 in value disappear?

 The bank will loan on the lesser of the appraised value or the purchase price 99% of the time.  It doesn't matter if it appraises for $1,000,000 the bank guidelines don't let them base their loan on the $1,000,000 if they are buying for $600,000. Plus it is not an appraisal they ordered. 

Geez, why ya wanna pick on Bob instead of addressing the real issue?  Who is selling a $800,000 property for $600,000?   Grandma, right?  So structure the contract so that Grandma is gifting the $200,000 over 10 years to grandson and wife! 

Or, the property is REALLY only worth $600,000 and someone has some questionable $800,000 appraisal.  Geez. 

F N Whippersnappers!

Smiley Face.

Originally posted by @Bob Bowling:
Originally posted by @Mark Ferguson:
Originally posted by @Bob Bowling:
Originally posted by @Chris Adams:

@Bob Bowling Im not arguing that point. And I completely feel the same way. But I know what banks say and how they look at things.

Now its highly likely that at some point down the road he might be able to refi out his down payment. But I just can't see OP getting a no money down loan for $600k unless he has substantial holding to pledge, or a phenomenal relationship with the bank.

Um, what would be the LTV if the bank gave him $600,000? See how you are trying to make over $200,000 in value disappear?

 The bank will loan on the lesser of the appraised value or the purchase price 99% of the time.  It doesn't matter if it appraises for $1,000,000 the bank guidelines don't let them base their loan on the $1,000,000 if they are buying for $600,000. Plus it is not an appraisal they ordered. 

Geez, why ya wanna pick on Bob instead of addressing the real issue?  Who is selling a $800,000 property for $600,000?   Grandma, right?  So structure the contract so that Grandma is gifting the $200,000 over 10 years to grandson and wife! 

Or, the property is REALLY only worth $600,000 and someone has some questionable $800,000 appraisal.  Geez. 

F N Whippersnappers!

 More likely the latter, hence why the banks won't lend.  lol

We are trying to help the OP understand lending guidelines.  Gifting money back over 10 years does not give the buyer $120k now to buy the property. Plus it would have to be disclosed and the bank would never go for that. Or it could not be disclosed which could be considered bank fraud. 

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