Offlinehey can someone explain to me if i bought a house for 60k but if i had it estimated, it would be worth at least 100k but its not a forclosure, would it mean i have 40k instant equity even though i didnt pay for any payments yet? or do you need to "build up" your equity by paying your bills over time in order to have that 40k equity? someone who knows the answer to this question please let me know. HAVE A GREAT DAY! THANKS FOR CHECKING OUT MY QUESTION.
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Yes, that is considered instant equity.
Appraisal Amount - Amount Owed = Equity
It doesn't matter how many payments you have or haven't made, equity is equity.
Just ensure the appraisal is a conservative one, and not a liberal one designed meet lender qualifications. There were mortgage brokers who would have an appraiser say a outhouse built on a 1000sqft lot in the middle of no where was worth $500,000 if it meant they could get the loan through and resold.
thank you rebucks. thats what i thought.
very simple way of putting it
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