![]() ![]() But you can usually do your research and spend maybe the better part of a day to find one that will," Rhodes said. "Yes, some lenders won't loan small amounts. These three additional challenges can often prove difficult to overcome, Rhodes said. This makes it especially difficult for appraisers to determine an accurate value for these lower-price homes. Homes priced at $100,000 or lower might not have any comparables in some markets. Appraisers need to see what similar homes sold for in an area when they are determining what a residence is worth. Are there any comparables?įinally, there is the challenge of comparables, Rhodes said. And if buyers are purchasing a home that is that inexpensive, the odds are high that they won't be able to make up the $20,000 shortfall with their own financial resources. Lenders won't loan buyers $80,000 for that home. Say a home is on the market for $80,000, but an appraiser determines that the home is actually worth just $60,000. Real estate appraisers might decide if they are in particularly rough shape that they are worth even less than their low price tags. Such homes tend to be of lower quality, Rhodes said. These buyers typically face three challenges that are even more difficult to overcome, he said: First, it's not easy to find homes in many parts of the country priced under $100,000. Tom Rhodes, chief executive officer of Austin, Texas-based Sente Mortgage, said that it's not only finding a lender that's more challenging for consumers hunting for smaller mortgages. Kamrooz instead says that buyers should keep hunting for mortgage lenders that are willing to loan them a smaller dollar amount. The problem is that personal loans usually come with higher interest rates and less advantageous terms, Kamrooz said. Those buyers who can’t find a mortgage lender? They can always turn to a personal loan for, say, the $60,000 they need to finance a home. What does this mean for buyers trying to finance a home that costs $100,000, $90,000 or $80,000? They’ll have to do plenty of shopping with mortgage lenders if they want to find one who will originate such a small loan. It’s kind of the same thing on the lender side.” ![]() You know when a realtor finds a house for you, the more expensive that house is the more commission the realtor gets. “You can almost compare it to a real estate agent. “From a lender’s standpoint, it’s just harder to make a solid profit on a smaller loan,” said Kyle Kamrooz, co-founder of Irvine, California-based mortgage-technology company cloudvirga. It can actually be more difficult to land a smaller loan for one simple reason: Many mortgage lenders don’t consider these loans to be worth their time. You might think it’d be more challenging to qualify for a jumbo mortgage of say, $800,000 or more than it would be to gain approval for a smaller home loan of $100,000 or less. ICB Solutions | NMLS #491986 ( Close Modal Mortgage products are not offered directly on the website and if you are connected to a lender through, specific terms and conditions from that lender will apply. ![]() will not charge, seek or accept fees of any kind from you. By submitting your information you agree Mortgage Research Center can provide your information to one of these companies, who will then contact you. For a full list of these companies click here. If you submit your information on this site, one or more of these companies will contact you with additional information regarding your request. ICB Solutions and Mortgage Research Center receive compensation for providing marketing services to a select group of companies involved in helping consumers find, buy or refinance homes. Neither, Mortgage Research Center nor ICB Solutions are endorsed by, sponsored by or affiliated with any government agency. ICB Solutions partners with a private company, Mortgage Research Center, LLC, (nmls # 1907), that provides mortgage information and connects homebuyers with lenders. is a product of ICB Solutions, a division of Neighbors Bank. ![]()
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