P.G. House Deemed Too Round For a Loan
Photo courtesy of Mae M. Ngai and John G. New
Poor credit, a low annual salary and high levels of debt are all reasons that you might be turned down for a loan.
However, last Saturday, The Washington Post ran an article about a couple who were turned down twice by mortgage lenders for a home in Prince George’s County because of the property’s unusual shape.
From The Post article that was written by potential buyers Mae M. Ngai and John G. New:
Being “unusual” or “unique,” it was deemed “not marketable.” Despite its evident worth and multiple independent appraisals, the lenders said they could not assign a value to the house because there were no comparable properties. And, with no “value,” there was insufficient collateral for a loan.
UrbanTurf spoke with Prosperity Mortgage’s Tom O’Keefe about how often this seemingly strange situation occurs.
“One of the pieces that lenders look at is the house itself and if it is so unique, sometimes its value can’t be supported with comps,” O’Keefe said. “I have seen it happen, but only very, very rarely.”
The buyers being considered a risk and the fact that there were not suitable comps were not the only issues. The lenders also felt that if the couple defaulted on their payments, it would be difficult to resell the house because of its unique design.
This article originally published at https://dc.urbanturf.com/articles/blog/p.g._house_deemed_too_round_for_a_loan/2652.
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