$32,000 down required on $95,000 house?

[Eric P.]

We're in the process of buying our first investment property.  We tried a local mortgage broker but he doesn't seem interested on such a small loan so I called quickenloan.  They came back with a required 25% down and an all in estimate of $32,000.  This is NJ so the taxes on the house are $4,500.  But 25% down is $23,750 so its gonna be another $8,000???  Does that sound right?

I was really hoping for 20% down, 3-6 months of taxes, and 3% closing costs = $25,000 max.  Even though Quicken already pulled my credit I'm thinking I need to talk to a different local lender.

[Marcus Auerbach]

Yes you should. Smaller local banks are the best. QL is probably the last place I would consider. But 25% is pretty much what a bank wants to see from an investor, unless it's owner occupied. The logic is that if you are in financial distress you are much more likly to walk away from your investment property than from your home, so they have  abigger risk and then have to dispose the property with a discount.