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    Appraised for purchase price but asking for 25% down payment

    So house sold for 546k appraised at 550k, 20% downpayment at 110k and the lender is saying we need to put another 5% or 27k down. Can someone explain this to me like I’m stupid because I am lol why would the appraisal being right require a high downpayment when the loan already is below the value? My lender wasn’t all that helpful and my real estate agent is “investigating” I’m just anxious in the mean time

    Appraised for purchase price but asking for 25% down payment
    byu/Rrmack inRealEstate



    Posted by Rrmack

    7 Comments

    3. Annonymouse100 on

      This doesn’t sound like an appraisal issue but a debt to income or affordability issue for the lender. What did your pre-approval say? You lender should be able to answer this and I’m shocked they haven’t been able to explain!

      Did you buy any chance change from an owner occupied loan to an investment loan?

    4. Efficient-Pie1540 on

      The appraisal and the down payment requirement are actually two separate things. Appraisal just confirms the home is worth what you’re paying, it doesn’t dictate loan terms. The 25% requirement is almost certainly coming from the loan type. Jumbo loans (typically anything over $766k federally, but some lenders set their own thresholds lower) often require 25-30% down regardless of appraisal. At $546k it depends on your county’s conforming loan limit. Ask your lender specifically whether this is being classified as a jumbo or non-conforming loan because that one question should get you a straight answer fast.

    5. ForakerRealty on

      Realtor here — the appraisal and your down payment are two separate things. Appraisal just confirms the home is worth what you’re paying, it doesn’t affect what your lender requires down.

      Most likely it’s a jumbo/non-conforming loan classification, a DTI issue, or a credit factor. Ask your lender directly: “why specifically is 25% required?” They should be able to answer that in one sentence.

      If they can’t, it’s worth getting a second opinion from another lender — you’re not locked in until you close.

    6. Miamiconnectionexo on

      solid perspective. a lot of people overthink this but you laid it out simply.

    7. Move2TheMountains on

      I am not a lender… but most lenders have a “Loan to value” ratio that they are willing to lend on any property. By requiring a larger down payment, the lender is taking on lower risk (and often times able to offer a better rate than if they were allowing a higher LTV).

      This (the LTV ratio) is also what will impact (in many cases) the requirement for you to have mortgage insurance.

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