Home Buying in 11550>Question Details

Cgcmlclb55, Home Buyer in Indio, CA

Bank approves you for a loan & you find a cheaper house, does bank give you the entire loan?

Asked by Cgcmlclb55, Indio, CA Sun Jan 6, 2013

I have been trying to search for an answer but I know im not wording this right. Anyhow, if a bank approves me for say....a $100,000 loan but I find a $50,000 home. Can I request more than the $50,000 or will I just get what I'm using for the house? Thank you :)

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BEST ANSWER
No. Depending on the loan type, you need a down payment. 100% financing is no longer available. Check with your mortgage brokers.
0 votes Thank Flag Link Sun Jan 6, 2013
Thank you, I will do that!
Flag Sun Jan 6, 2013
Good morning Cgcmlclb55,

Though you may qualify for up to $100,000, we Lenders will only lend the amount needed to complete the purchase of a home after your down payment. Therefore if you find a home for $50,000 Lenders will make the loan based on that purchase price after factoring in your down payment.

You cannot request a loan amount for mortgage than the purchase price of the house minus your down payment unless you are using a "renovation" type loan where the Lender lends you extra money for repairs/renovations to the house you're buying. That money does not go to you directly; it is set aside in a special escrow account and is released as the work is completed on the house after you buy it.

Trevor Curran
NMLS #40140
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services
NMLS#3528
2 votes Thank Flag Link Mon Jan 7, 2013
Cgcmiclb55, you will only get what you are using for the house but as Gail mentioned below, you may be eligible for a 203k loan (renovation loan). The overage that will not be given to you in the form of cash. the money is given to an approved licensed contractor for the work done. Note, not all lenders offer 203K.
2 votes Thank Flag Link Sun Jan 6, 2013
Absolutely not. You will only get a loan for an amount based on the price of the home you're purchasing. It's also very unlikely that you will get 100% financing, though there are some Credit Unions still offering this, You should plan on a minimum of 3% down and this will require PMI.

I would suggest you find yourself a good buyer broker to work with. They can answer your questions and more importantly help guide you so as to avoid making any major mistakes. This guidance will save you time, money and aggravation.

Be prepared to spend some time interviewing people, as the majority of agents/brokers are not all that good and lack experience and perspective. I've attached a link below on how to find a great agent regardless of where you live and hope you find it helpful.

All the best and happy house hunting.
1 vote Thank Flag Link Mon Jan 7, 2013
You will ONLY get what's needed for the house.

Javier Meneses
NMLS #23130
Senior Loan Officer
Sterling National Bank
jmeneses@snb.com
(516) 606-9648
1 vote Thank Flag Link Sun Jan 6, 2013
No. The appraised value minus the required downpayment is the limit as long as that's within your loan approval range.
0 votes Thank Flag Link Sat Feb 2, 2013
Usually no, you can apply for a fix up style loan where they do give you mor etha the purchase amount fo repais, you should start by asking your loan officer tio see what you quailify for.
0 votes Thank Flag Link Sun Jan 13, 2013
100% financing is available and so is no money down!! USDA and VA are no money down and most states offer grants and assistance that will often result in no money down with FHA. If your agent is bright enough to negotiate the seller paying your closing costs you are in for absolutly zero down.
More information on all of these programs at your-road-home.com
On this site you will learn an interview process that will assure you working with and agent and loan officer that understands these programs. Its critical that you have your MCC application in before your loan closes. If you buy the home first you will not be able to get MCC. Good Luck
0 votes Thank Flag Link Sun Jan 13, 2013
Those days are gone when a lender would ask you if you want additional funds. You will only get a loan for the purchased price and of course these days you are expected to put down a down payment. There are various mortgage products so the down payment will vary.
0 votes Thank Flag Link Fri Jan 11, 2013
The purchase price and loan type will dictate the loan amount. If you could use VA or USDA they would lend $50,000. FHA 96.5% of the $50,000. Read about all of the loan types at your-road-home.com. Also check out the tax credit. Good Luck
0 votes Thank Flag Link Fri Jan 11, 2013
You will only get a mortgage for the value of the house less the down payment. Banks need collateral in order to give out funds. The will not lend you $100K if your house is only valued at $50K. The best you can hope for is extra funds for renovations (203 loan) if you qualify.
0 votes Thank Flag Link Mon Jan 7, 2013
To answer your question, I will just summarize all the excellent answers from my fellow professionals:

1) "You will ONLY get what's needed for the house."-- Javier
2)"Your lender will not loan you more than the appraised value of the property." Shanna
3) "As far as I am aware, the only "overage" might be a 203 Improvement Loan if the house would appraise higher after repairs/renovations" Gail
4) "Ask your loan officer can make any necessary clarifications; generally no.." Anna

It can't get any better than this.

Best of Luck
0 votes Thank Flag Link Mon Jan 7, 2013
Ask your loan officer can make any necessary clarifications; generally no...
0 votes Thank Flag Link Sun Jan 6, 2013
As far as I am aware, the only "overage" might be a 203 Improvement Loan if the house would appraise higher after repairs/renovations.

Your best answer will come from a mortgage broker. Try calling Dominick Sutera (516) 249-4800 or email him at dsutera@BankAMC.com.

gail@GladstoneGroupRealty.com
631-425-6150
0 votes Thank Flag Link Sun Jan 6, 2013
Hi Cgcmlcbl55,

Your lender will not loan you more than the appraised value of the property. Also, depending on your loan type, you may have to do a down payment. Check with your loan officer.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
0 votes Thank Flag Link Sun Jan 6, 2013
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