If you buy a house and it cost let's say 115,000 and you get a loan for 130,000 what happens to the remainder

Question

of the money

Answer 1

That doesn't happen, at least not anymore. Lenders are not giving out mortgages for more than the purchase price of the home.

Answer 2

Well you get the money minus closing costs, but you are paying for that extra loan for the next 30 years.. Usually not a good the way you do it.. Instead buy the 115,000 house and get the loan for 115,000... Then the money you would have paid on the 130,000 loan lets say $130.00 a month put that into a savings account every month if you did that for 30 years without ADDING your interest you would get well over $46,000 and you would have your 15,000 in less than 9 years..

If you do opt to get the Cash I would suggest you set a side a certain amount of the money to at least invest back into your house.. Upgrade your counters and get some landscaping.. Put the money to Work don't waste it.

Answer 3

Unless you made a deal with the seller to receive $15k cash back after the purchase, the bank will normally not give you extra money after the closing. However, there have been special circumstances, where banks have loaned money to buyers in excess of the purchase price for repairs, if the house has appraised for much under the selling price. So, in that situation, I would use the money to make the home habitable.....fix, plumbing, heating, electrical, roof, things like that. But if for some reason, you just get "extra" money.....put it back on the principle and it's less interest you will pay each day into your future! Good luck.

Answer 4

Some lenders used to give out up to 120% loans where you could actually get the difference in a credit line for "home improvements." Those days are long gone however. These days, you will more likely be required to bring at least 5% to the closing table...

Answer 5

Couldn't you just take the extra money and put it down on the loan?

Answer 6

You get to keep it and do anything you want with it.