Deal Killing Mortgage Broker

Helping a friend sell an apartment (I'm a licensed RE Broker as well as a Loan Officer) in the Riverdale section of The Bronx has been interesting.

By interesting, I have an opportunity to hear what my competition is telling their clients. Today was interesting. I had an appointment with a prospective buyer to show her the apartment in the listing below. She called today and canceled. The Washington Mutual loan officer with whom she is working told her that a 20% down payment was too much.

Perhaps the prospect doesn't have the money. That would be understandable, one needs about $66,000 to buy this apartment ($44,000 down payment and $22,000 in post-closing reserves). That's a lot of money.

But if the loan officer actually did tell her that putting 20% down on a property is foolish, then the mortgage industry has not learned from their mistakes. Since when is it a problem to actually have some equity in your home?

Low down payment financing on a 2 family house

Without getting a subprime mortgage, a borrower can obtain 95% financing on a 2 family home. These loans can be structured in many ways, but the most common is probably an 80% first mortgage and a 15% second mortgage or Home Equity Line of Credit. This can also be done when the purchase price is more than $1,000,000 which is common here in New York City. With these properties, sometimes the first mortgage will be at a better rate if the first mortgage is less than $1,000,000 and the rest is a second mortgage.