Should my wife and I take a larger mortgage to account for upgrades we may want to do?

Question

We could get a pre-approval letter for well above what we purchased the house for. Is it common practice or even possible to get a larger loan and to use the extra money to do some upgrades? This would be instead of taking our own money out of the bank, and the extra amount would only be $10,000-$15,000. Which would not inflate the mortgage payment by that much.

Answer 1

In todays market, it is very unlikely you will be able to get a mortgage for more than the appraised value of the house.  And appraised values tend to no be a whole lot more than the purchase price.

You will have to use your cash or take out a home improvement loan for those renovations.

Answer 2

Try get pre-approve with this loan company and see how much you can take out and how much your payment will be.

http://www.amerisave.com/partner/chongth...

Answer 3

You won't be able to do what you're asking about. That is, you won't be able to borrow more than the house is selling for and use the excess for upgrades. You won't be able to walk away from closing with cash.

What you should do, instead, is ask the seller for "seller concessions." That'll accomplish the same thing you're trying to do. Ask your Realtor about it.

Answer 4

Are you talking about a refi?  If you have the equity, you can do so.

Answer 5

Why pay interest on money instead of taking it out of the bank?   The bank pays you far less interest then you would be paying.

This makes no sense at all, very poor money management.