Minimum mortgage loan amount.?

$40,000 house and the bank says minimum motgage is 50K. Implications? Thanks.

Update:

The property will appraise for more than $50,000. No $50K mortgage and $40k goes to the seller and the rest goes.......... (?)

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  • 2 months ago
    Favourite answer

    Lenders may set minimums. If they decide there's no money to make on small mortgages, they do not have to make those loans. Keep searching for a lender with a lower minimum.

    Your update suggests criminal fraud.  You cannot falsify purchase contracts.  If the property is worth the higher amount and will appraise for a higher mortgage, then the money goes to the seller. Kickbacks to the buyer are illegal.

  • 2 months ago

    You simply shop for a mortgage loan from someone else.  Currently, for instance, Navy Federal Credit Union goes as low as $10,000 and Quicken Loans start at $25,000.  Lenders may charge higher closing fees and a higher interest rate for a small loan.

  • 2 months ago

    Sure - you can't get a mortgage from that bank, as you don't need to borrow enough. 

  • 2 months ago

    The implication is that you won't get a loan for this house, from this bank.  Try another bank or even a mortgage broker.  The fees might be high, but I'll bet you find someone willing to lend a smaller amount for this house.

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  • 2 months ago

    Odd, my mortgage was on a  $30,000 range.  Try another bank. 

  • Anonymous
    2 months ago

    Minimum mortgage is 50k and the house is 40k.  

    What is your question?  You didn't actually ask one.

  • Anonymous
    2 months ago

    You can pay with cash and be mortgage free.

  • 2 months ago

    you don't get the mortgage...you have to come up with 40K cash or get an alternate loan

  • Anonymous
    2 months ago

    With rates as low as they are, they cant make enough on small loans.  Thus, you need a higher priced house.

    Same way with cars. When interest rates were sky high, $2000 car loans were possible, now, $7500 is usually the minimum.

  • 2 months ago

    It's not worth it to the bank to make a mortgage loan for less than $50K.

    If the house is only $40K, then you can't get a mortgage.

    You may be able to get a personal loan but the interest rate will be much more since it's an unsecured loan.

    Implications for most people:  If you don't have $40K cash plus closing costs, you aren't buying this property.

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