Financing in Boston>Question Details

Trulia Boston, Home Buyer in Boston, MA

Can one take out a first time mortgage that is greater than the cost of the house and use the excess money to pay off other debt?

Asked by Trulia Boston, Boston, MA Thu Feb 28, 2013

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With a purchase mortgage you cannot take out more than the cost of the home to consolidate debt. There are renovation mortgages that allow you to borrow more than the home purchase price to update, expand, or make general improvements to the home.
0 votes Thank Flag Link Thu Feb 28, 2013
I know many informercials make the claim that you can, but in reality not without commiting fraud or having the lender being some private party like your Mom make the loan.
0 votes Thank Flag Link Wed Mar 20, 2013
There is a difference between the "cost of the home and the value of the home". For example
the value of your home could be $100,000 and the cost of the home could be 50,000. You can
refinance your home for up to 70% of the value or $70,000, payoff the first and do what you please
with the extra $30,000. When you are initially buying the house you cannot finance it for more
than you are paying for it unless it is a 203K FHA mortgage.
0 votes Thank Flag Link Wed Mar 20, 2013
It might be prudent to examine the wisdom to put your home at risk to pay off some "other" debt. Your first step is to review your total situation with a lender - this is not a DIY project, use an expert.
0 votes Thank Flag Link Sun Mar 17, 2013
No, but a qualified mortgage broker should be able to give you specific information on alternative options you might have.
0 votes Thank Flag Link Tue Mar 12, 2013
You can not. I would contact a mortgage broker for more details as they are trained properly in this filed.

Best Of Luck
0 votes Thank Flag Link Tue Mar 5, 2013
They fellas below are right you could do a construction/rehab loan, however even with those, the lender typically will not just hand you the cash. The money is kept in escrow, and the bank's attorney will pay the contractors directly. The home is collateral for this mortgage, therefore they want the money to be used to increase the home's value.
0 votes Thank Flag Link Thu Feb 28, 2013
No. You could put 3 or 3.5% down to save cash.
0 votes Thank Flag Link Thu Feb 28, 2013
I would contact a local lending professional to help with this answer.
There is not enough detail in your question.

I know this guy can be helpful:
Bob Tranchell Total Mortgage Services LLC (508) 367-5731 cell

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0 votes Thank Flag Link Thu Feb 28, 2013
I agree with Michael. Best way to do it is to get a rehab/construction loan.
0 votes Thank Flag Link Thu Feb 28, 2013
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