Tuesday, April 10, 2007

Now Selling or are they?


Park View Condos, originally uploaded by Prince of Petworth.

These are some condos for sale just south of the Petworth metro. And they must really want to sell them. What the hell is 103% financing?

8 comments:

Rich said...

Thanks to Google I can tell you what 103% financing is. The sign says 0 down payment, meaning your loan covers the entire price of the condo; that would be 100% financing. But they go further and cover closing costs, up to 3% of the purchase price, bringing you to a grand total of 103%.

Prince of Petworth said...

Crazy. Nicely done, Rich. Thanks.

vague ponderings said...

But...how could you get a 103% loan? Banks don't generally loan for more than the property appraises for, so are they selling these below market value?

Anonymous said...

vage, you get a 103% loan from a bank that offers a 103% loan. Sure, Bank of America will not write that loan for you, but other banks will. And they often will tack on a double digit interest rate to go with it.

Anonymous said...

I believe in home ownership as a great thing, but if you need a 103% loan, maybe you should wait a couple of years and save up some extra scratch.

This might get you to "ownership" of a nice little condo, but really, who owns who in this situation?

CPT_Doom said...

Actually, I used the 103% loan option when I bought my house near Sherman Circle 4 years ago. It was a great option for someone like me - a good job and good credit but no down payment to speak of. Basically, as it was explained to me, the closing cost part of the loan was basically a personal loan from the bank to me, based on my good history of repayment, rather than a loan for more than the house was worth. The interest rate was much higher than market (7.25%), but my loan did not have mortgage insurance, so it was a better deal financially for me.

Of course, I just arranged for my refinancing, at 6.125%, because home values have increased enough that I have much more than 20% equity in my property now.

Anonymous said...

Cpt Doom, good work. You're right, this type of arrangement could work out for someone who needs the extra help but knows how to manage the situation.

Unfortunately not everyone knows how to best manage the situation.

Anonymous said...

just fyi....these apartments are really nice inside