+1 vote
asked Jan 17, 2018 in Buying a Home by anonymous

2 Answers

+1 vote
Hi, and thank you for your question.

The agencies themselves don't list minimum loan amounts, but individual lenders may impose minimums. That's because regardless of loan size, every mortgage requires a lot of work on the part of a lender -- processing, underwriting, auditing, document generation, and conforming to government guidelines at every step. That's expensive, and a small loan may actually cost the lender money. Most of us don't want to pay for the privilege of doing our work, and neither do mortgage lenders. Some will make smaller loans but add a low loan amount surcharge.

You may have to work a little harder to find a lender for a smaller loan, but financing should be available. Good luck.
answered Jan 17, 2018 by GinaPogol (47,650 points)
0 votes
Mortgage Lenders cannot refuse anyone from applying and/or taking a mortgage application from borrowers.  Most lenders don't want any loans under $100,000. However, if a borrower qualifies for a $50,000 loan and wants to apply, the loan officer needs to take the application and the lender needs to do the loan. Refusing to do the loan is illegal. Lenders will lose money on lower loan amounts but need to do the loan. Rules and Regulations.

Gustan Cho
Branch Manager
The Gustan Cho Team at USA MORTGAGE
answered Feb 7, 2018 by GustanCho (106,540 points)

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