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Borrowing More |
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I'm a first time home buyer (potentially). I make over 100K per year, single with no dependents. I would ideally like to take out a loan for about 350k but purchase something that is being sold for 310K since the market is dipping so low. I'd like to use the extra 40K to possibly do upgrades to the property as well as pay off all credit cards I currently have.
Is this type of loan possible in this economy? Would someone give a first time home buyer a loan which is higher than the value of the property? |
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The whole point of a mortgage is that if you don't repay the debt, you've given the lender the right to have the place sold at public auction to get their money back. In case such a sale didn't yield full market value, it wouldn't be safe to lend you the whole purchase price. That's why lenders require a down payment, to give themselves a cushion in case of problems. They certainly won't lend you more than the place is worth, now or in the future. |
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Edith
Originally published on October 1, 2008 |
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