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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 New York, New York Wed Mar 6, 2013

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12
Javier Meneses’ answer
BEST ANSWER
If we're talking about a purchase, the answer is no. Like Mark said, us lenders consider this to be negative equity. If the case is that you inhereted a home free and clear of any liens, and you decide after a while to take out a mortgage for the first time, and use the funds to pay off other debt, in this case you'll be allowed to as long as you qualify for the mortgage.

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648
2 votes Thank Flag Link Wed Mar 6, 2013
No that is not possible. That would give you negative equity and would be a very risky loan for any lender. There is no bank that would do that type of loan.
1 vote Thank Flag Link Wed Mar 6, 2013
If you have a lot of debt now, you may not qualify for a loan. Have you gotten a pre-approval yet?
0 votes Thank Flag Link Fri Apr 12, 2013
Not to pay off debt. There are loans where you can finance repairs on a purchase. FHA 203k loans and Homestyle renovation loans allow you to finance repairs when you purchase a home.
0 votes Thank Flag Link Fri Mar 29, 2013
Really? You're really asking that? The answer is no, but they will finance your purchase of the Brooklyn Bridge, which I will sell you.
0 votes Thank Flag Link Fri Mar 29, 2013
NO. Bueyr beware of anyone who tells you ,you can do this.

Kawain Payne, Realtor
0 votes Thank Flag Link Thu Mar 7, 2013
No you can't. Banks have never allowed buyers to take extra money out when buying a house to pay off personal debt.
0 votes Thank Flag Link Thu Mar 7, 2013
Actually when I bought my first home years ago I had $5,000 debt on credit card. My lender made me add that debt on to mortgage. My mortgage was actually $5,000 more than I needed to borrow. But I still put 20% down and had liquid assets left and equity in the home.The bank wanted all my debt.
0 votes Thank Flag Link Wed Mar 6, 2013
Mitchell Hall, Real Estate Pro in New York, NY
MVP'08
Contact
It's called mortgage fraud.
0 votes Thank Flag Link Wed Mar 6, 2013
Mitchell Hall, Real Estate Pro in New York, NY
MVP'08
Contact
Coming from Trulia, that's a silly question.

Janet Nation, CBR
Sailing Home Realty
Direct: 646-321-9649
Office: 516-377-4760
Licensed Real Estate Salesperson
http://www.jnationproperties.com
0 votes Thank Flag Link Wed Mar 6, 2013
NO UNFORTUNATELY THE FIRST TIME MORTGAGE IS ONLY FOR THAT OF THE HOUSE AND YOU CANNOT TOUCH ANY OF YOUR PERSONAL DEBT

Brandon Sturman
0 votes Thank Flag Link Wed Mar 6, 2013
Are you asking if the new mortgage is greater than the "cost" (meaning what you paid for it) or "cost" (meaning market value)? If the new mortgage is more than market value than you most likely won't find any lender willing to loan you more than your home is worth.
0 votes Thank Flag Link Wed Mar 6, 2013
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