If you have 20% equity (or more) do you still need cash to buy?

[Robert Delgado]

Hey Everyone! I found a great deal in my local area, pre listing of someone that is moving in a week. They are selling the home for 100k but I firmly belive the property will appraise for 150k or more of that creating alot of equity. I spoke with the a mortgage broker that is a friend of mine and he told me that I need 20% of the purchase price for a down payment and equity dosent matter. Is that true? Will a lender decline me if there is a ton of equity but Im not putting any money down? I dont quite have 20k to put down, but I thought the great equity could help me get cash down waived. Does anyone have any experince with this situation? Thanks!

[Theresa Harris]

Yes it is true unless you are going to live in it.  For rentals, you need 20% of the purchase price as a down payment.  You could buy it, wait 6 months and refinance pulling out your down payment (if the numbers work).