Sorry, it doesn't work that way. As a general rule, the "value" for mortgage purposes is the *lower* of the purchase price or the appraised value. The silver lining is that your 10% down payment is also based on the lower of the two, so it would be smaller. If the down payment is an issue for you, consider other types of mortgages that do not require 10% down. A 10% down payment means 90% financing, which requires private mortgage insurance (PMI) if the mortgage is conventional. If you're going to have PMI, you might as well get a government loan if you can qualify. With an FHA mortgage, you pay FHA mortgage insurance (generally cheaper than PMI) - and your down payment can be less than 3%.