Does anyone know if it's still possible to get mortgages for very inexpensive properties?

[Tobin S.]

I bought a small condo for $34,000 right before the housing bubble burst. When interest rates fell due to the declining housing market, I tried to refinance the place and was told I couldn't get a house that cheap with a mortgage then. They had a lower limit of $60,000- anything below that they wouldn't finance. That seemed rather shitty to me given that it's not uncommon for housing to be that inexpensive where I was living at the time which was Dayton, Ohio. Much of the Midwest is like that from what I can gather. The downside is that wages are low, too, compared to the coastal areas.

I currently have the condo leased, but I don't really want to be a landlord. I'd rather sell the place but have not been able to do better than renting it. I'm thinking about offering the current tenant a deal to buy it.

[NYC_SKP]

1. I can't imagine that being the case. Not then, not now. Call around.

Good luck.

[bluesbassman]

2. Yes, it'll just be a slightly higher interest rate for a low balance loan.

Rates have climbed dramatically in the past few months. The problem with a small loan is the fees to benefit ratio. No lender is going to give you the so-called "no cost" loan as there is not enough rebate available to offset the fees. The fees then will need to be absorbed by the borrower either by writing a check or raising the loan amount.

So here's some sample math:

Assume the original $34k is at 7%. That would yield a 30yr amortized payment of $226. Refinancing at 4.5% (current zero point rate) would yield a payment of $172. Assuming approximate closing costs of around $2,000 the $50 savings would take 40 months to recapture.

Not sure how closing cost run in your area, but that's about it for CA.

[Tobin S.]

3. Thank you

[trof]

4. Check bankrate.com