Zero Down Mortgage Using Homes Value

[Jared Baker]

Hello BP,

Is it possible to use the property your buying as your "down payment"? An example would be

Home value: $120k

Purchase price: $76k

Loan amount: $76k

The idea here being that the seller needs to get rid of the property for financial reasons and would accept a lower amount to get out of their current situation and I would be able to help them out quickly. Would a traditional lender look at the property and say that it's a low risk situation based on the loan amount vs what the house is actually worth?

Or is my only option to get a loan as usual with a 20% down on the 76k and then refinance up to get to $0 out of pocket. Kind of hoping to skip the refinance step or the extra closing costs associated with the refinancing.