Am I guaranteed a mortgage approval on a property that was bought outright?

Question

I have no credit whatsoever, and I am in the process of purchasing a home with cash. Will I be able to get some type of loan from it? Its assested value is of 35K and would like to borrow 10K. Any information you can give me will be greatly appreciated. Thanks in advance!

Answer 1

it's possible, you'll probably have to go through a broker to get a loan though, but your gonna get socked.  The only loan you could get would be a home equity.  Most home equities price according to loan amount.  Thus a home equity for 10k will have a higher rate than one for 50k.  Home equity underwriting is tougher now too, many banks don't have the capital to lend for them so they make it hard to obtain.  Also, it can be an expensive proposition, especially a heloc, they work like credit cards, do not be fooled, they accrue interest daily.  Without having credit, I have to say getting a home equity would be difficult, especially at this point.  If you do, you will have to provide bills, electric, phone, credit card, 12 months worth to show that you pay on time and pay your bills.......btw....make sure you buy title insurance, do not be cheap about this, if you don't have title, a prior owner can place a claim against the property and if proven correct, you would lose the property so get title insurance

Answer 2

You are not guaranteed.   Almost guaranteed but not fully.  Paying cash for the house is a great sign for a lender.  When you apply for the new loan, you will face the same scrutiny that you would if you were buying.  Good credit, good job, good track record of savings.  'No credit' is actually wonderful credit.  If you had not paid your bills, you would have bad credit.  Banks no longer need for you to have a credit card to know if you are risky or not.

One final note.  Banks like big loans.  $10,000 is tiny.  You might pay a higher rate because it is so small. /

Answer 3

If you are paying more than 10k in cash then yes you will be able to get a loan for 10k. Because you will own more equity than the bank has to put up, so the bank can easily make back the money if you default and they foreclose and sell your house.

Answer 4

No.  A mortgage is a loan.  You are never "guaranteed" a loan.

Answer 5

You are not guaranteed anything.  But, if you put up a $35K property to secure a $10K loan I can't see why you would not get it.