Question : How does home loan work: Serious answers please?
Hi,1. Do you borrow from a bank exactly how much the home is worth or you can see a home of 200000 and borrow 2500002. When you decide on a home, does the bank give you the money to pay the sellers or they pay them directly on your behalf3. If the money you borrow happen to be higher than the home value, what happens to the remainingI guess the question is, how does home loan work?THANKS A LOT
- asked by well
All Answers:
Answer #1
as a general rule NOBODY is going to loan you morethan the value of the home. that would be stupid.usually, you have to come up with some part of theloan for a down payment. never never never getwhat's called an ARMS mortgage. that stands foeADJUSTABLE RATE MORTGAGE take a straight 30 yearloan at a FIXED RATE that will never change. this is why millions of people right now all overthe world are loosing their homes because of theadjustable rate mortgage. usually a bank ormortgage company. now is actually a good time tobuy because (unfortunately) most all homes havelost about 20% of their value in this last yearwhich is contradictory as to what has alwayshappened in the past, that is the value has mostalways INCREASED in value. You never touch themoney that changes hands. after all you couldjust take the money and run.
- answered by adam/penny
Answer #2
if the seller is asking more for the house thanwhat the lender thinks itsworth they won't giveyou the loan. the lender you are going to usewillappraise the house and if the price you are payingfor the house is the same or less than theappraisal they will loan you that amount. iftheirasking more for the house than it appraisesyour not going to get a loan.your not going toborrow more money than what the value of thehomeis. if the asking price is 200,000 and itappraises for that, that's how much you will get,not any more. you won't see any of the money,yourlender will pay directly to the title holderof the house.
- answered by bob and dolly k
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