How can I find mortgage financing?

Question

I am in the process of purchasing a home. My husband and I have 790+ credit, reliable income, enough liquid assets to purchase the home outright. We have a home that is paid for, and wish to purchase another property as investment. Our bank has told us we can put 10% down, the property is inexpensive. Our issue is that the bank will not accept our appraisal because there is nothing comparable. We live in a very rural area, and the property is an attached-dwelling, sharing one wall with another single-family unit (kind of like a townhome, each side has their own 1/2 acre lot). There is NOTHING like it in the area. The bank won't accept a cost approach appraisal. What can we do? We've been assured that our credit isn't the issue, it's the house. But the house is a great deal, in great condition.....would a mortgage broker give us a different answer? We tried mortgaging through the bank whose held our accounts for 40 years.

Answer 1

Lending Tree, with a market today, I had my mortgage co. go bankrupt one week before closing.  Went to Lending Tree was approved and closed a week later.

Good Luck.

Answer 2

I would try another lender.  Sometimes banks have restrictions that mortgage brokers can avoid through their pool of lenders.

(Be prepared for spammy emails from mortgage brokers)

Good luck!

Answer 3

There are different lenders that may provide the financing and will accept a cost approach appraisal.  A broker can help you find a lender, however, you will be paying more in points.  Do the research yourself by going online searching "mortgage lender resources."  You will find some of the same guides that brokers use in finding lenders, and in these guides lenders will provide their guidelines and contact info.  Another option is to work a deal with the seller whereby instead of giving the 10% down to a bank, you give it to the seller and ask that he/she carry back a mortgage note for the balance, and with your credit that shouldn't be a problem for them.  For more detail on this check out www.squidoo.com/futurecashnow

Good Luck

Answer 4

Yes get another lender --- some lenders will allow the appraiser a lot of leeway when you have rural property and this one certainly applies to that rule. Ask the appraiser to go 20 miles to see if he can get additional comps and place an addenda as to why.

You should be fine

I am a mortgage banker in TN & KY

Answer 5

Banks can be very particular about which loans to give due to their large clientele and the clout of their name.  However, that doesn't necessarily mean you'll get a better deal or a better rate- it just means it may be harder to get approved for a loan!  Ask around to see if your realtor or friends know a mortgage broker and make sure that the "good faith estimate" has comparable fees and rates to your bank's.  You shouldn't have to pay a higher interest rate or higher fees- the bank just can't approve it because they have such rigid guidelines.

Answer 6

Try another lender.  Some banks are really stodgey & seldom stray from their "formula".  Try a mortgage broker.

Answer 7

A couple things. Be careful, any broker you talk to will tell you they can get the loan done, but may just waste your time trying to find a lender that will do the loan. They may deal with 10 lenders and none of them may do the loan. I'm not sure if there is a lender out that uses the cost approach as the value of the home. I have been in the business for 8 years and have never saw one do that.

If there are no townhomes or duplexes within a 10 mile radius, I would have the appraiser do a couple of things. 1) find out how far he has to go until he finds those types of homes. 2) Find single family residences that have a 1/2 acre and are about the same size as the half you are looking ot buy and have him make adjustments to the value based on the new property...

Tell the appraiser that you need an as is value...based on the laws in your state he can get this for you based on what I have said above....the only problem is what the bank will tell you about the value based on their appraisal review.....I would say that you can try a USDA loan but based on your income you probably have too much money...

Answer 8

I work for a direct lender and I use to be an appraiser. There are always comparable properties, the appraiser just has to look further out. If he can find one like-property, he can do a legitimate appraisal.

If the lender is not accepting the appraisal, it may just be the lender. These days different lenders have different guidelines and most lenders guidelines have stiffened. If you're putting 10% down, there is a lender who will work with your appraiser and get to the bottom of what the property is worth. Every property has a value, you just need a competent appraiser and a lender with clear guidelines on what they require from that appraiser.