Is I get pre-qualified for a $100,000 loan, does that mean I have to take that amount?

Question

What if I find a house for way less than $100,000. Let's say I found a house for $40,000, could I just borrow $60,000 and throw the rest in escrow to cover my property taxes and various fees?

What do you think? Are they going to push me to take the $100,000?

Answer 1

You only get a loan in relation to the lender's appraisal of the house, so in a sense the listing price is immaterial if the appraisal comes in below the listing price, no go on a loan even if the listing price is below 100K

Answer 2

no they won't give you all the amount, you can just take up the amount that you need

Answer 3

You can only borrow a percentage of the selling price.  If you found a house for $40,000 and the loan requires 5% down then you could only borrow $38,000.  Being pre-approved for $100,000 just means that you can't borrow more than $100,000.  They won't let you put the difference in escrow or take it in cash and they won't lend more than the house is worth.

Answer 4

no 100k is your max loan. if you find one for 40k then that is the sales price less down payment closing cost and the required reserves that will be needed to do a loan on the property, So no you don't get the whole 100k