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Do I need to put 20% down if the home I am purchasing is being bought under appraisal?
Posted on 5/28/18 at 9:57 pm
Posted on 5/28/18 at 9:57 pm
Condo I am buying is appraising for $165k and I am buying for $150k. So, if I continue with my plan of 20% down ($30k), I have an instant $45k (27.27$) equity.
Does it make sense, and is it allowable, to instead pay a smaller downpayment and just do the 20% of the $165k (which is $18k)? This would result in 20% and no PMI and allow me to keep $12k in the loan.
Does it make sense, and is it allowable, to instead pay a smaller downpayment and just do the 20% of the $165k (which is $18k)? This would result in 20% and no PMI and allow me to keep $12k in the loan.
3
Posted on 5/28/18 at 10:13 pm to rpg37
No. Your lender will use your agreed-upon purchase price as the market/appraised value in a purchase transaction.
Posted on 5/28/18 at 10:16 pm to rpg37
Appraisal is irrelevant here.
Posted on 5/29/18 at 5:50 am to rpg37
Lenders lend on the lesser of the appraised value or purchase price.
Posted on 5/29/18 at 2:46 pm to ds1tiger
quote:
No. Your lender will use your agreed-upon purchase price as the market/appraised value in a purchase transaction
This ^
To remove PMI early, without putting down 20% of the purchase price, you would need to refinance in a year or so. That is when the appraisal (you would need to get another one) is relevant.
Posted on 5/29/18 at 8:43 pm to seawolf06
quote:
To remove PMI early, without putting down 20% of the purchase price, you would need to refinance in a year or so. That is when the appraisal (you would need to get another one) is relevant.
Understood - thanks to al responders. Does doing this, what I have highlighted, make any sense, in my case?
Posted on 5/29/18 at 8:45 pm to ds1tiger
quote:
No. Your lender will use your agreed-upon purchase price as the market/appraised value in a purchase transaction.
bingo!
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