Can the money left on a home loan be used towards upgrades such as buying new fridge, new furniture... What does a home loan looks like? ?
Does the home loan come in a form of a "credit card"?
Let's say, I was approved for 300K in NC.
The house is 250K.
Do I get all 300K or only 250K ?
And if I get all of it, can I use the remaining 50K towards future upgrades such as central heat pump, maybe building additional room, changing flooring etc.
- Christin KLv 74 weeks agoFavourite answer
I think you're confusing two terms: "Home loan" means mortgage--"Home Equity Loan" is a line of credit you can draw on, which is based on you already owning a home.
Yes, you can buy anything you want with the home equity loan (or line of credit.) Appliances, furniture, any sort of home improvement work, landscaping--whatever you want. It usually gets deposited into your account and you can write checks on it, or sometimes they will indeed issue a plastic card to use.
If you are talking about a mortgage and you were approved for $300K but the house you buy is only $250K, you have a choice of taking out a mortgage for $300K on the home and using the rest for necessary renovations, OR you will simply buy the house for $250--and there IS nothing 'left over,' The lender writes the mortgage for the PURCHASE PRICE of the house. In order to get the higher amount, you have to show that you are buying a house in need of improvements that the seller will not make--which will, in effect, make the purchase price higher (the sale price plus the improvements.) You won't be able to use that money to buy anything except HOME improvements--not furnishings and appliances. Basically, you're buying a house that you have to renovate and it will raise the price you pay.
No, the mortgage does not come in the format of a credit card. It is a single loan written by a lender and you will either receive a payment book or monthly statement in the mail in order to make your payments.
The home equity loan or HELOC (home equity line of credit) will be paid monthly as well--the minimum amount you will pay is the interest on whatever they give you--and it will, in effect be like another mortgage. You may want to consider it once you actually OWN the house. You can't get one unless you do, and unless you've been there a few years at least.
- RichardLv 64 weeks ago
There is no leftover money
- SlickterpLv 74 weeks ago
There is no money left on a home loan. If the house is $250, the loan ends up being $250,, even if you qualified for more. They don't lend more than the home's value, because the loan is secured by the home and if you don't pay, they need to be able to get the money back.
- 4 weeks ago
Get a 2nd mortgage in first position when you buy. I did this pre 911. Don't know if banks allow it since Dodd-Frank, but you can ask. That way you can use some of the extended line of credit after the mortgage is secured for furnishings and appliances. It's similar to getting a credit card. The banks and developers did summersaults helping boomers buy houses in the '80's and '90's, not like today.
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- curtisports2Lv 74 weeks ago
NO. If you are approved for 300k, it means you can get a mortgage UP TO 300k. It does not mean if you buy something cheaper, you get to go on a spending spree with the rest.
Lenders take a risk every time they make a loan that the loan will not be repaid. That is why for most real estate transactions, they require you to put some money down. If they have to take bak the house if you stop paying, they have at least some chance of breaking even when they resell the house. NOBODY is going to let you borrow more than what the house is worth.
SOME mortgages allow for costs of rehabilitation of the property, the cost of repairs and improvements that will increase the value once completed, so there is less risk in giving a loan for higher than the purchase price. But you must document all of the repair costs with lender-approved contractors. No buying personal items.
- MaxiLv 74 weeks ago
No, you have been approved or UP TO 300k, if the bank agreed the property is worth 250k and that is what you purchased it for, then you would be expected to pay at least 10% deposit, so you would have a mortgage of 225k
- R PLv 74 weeks ago
You only borrow the amount of the purchase minus your downpayment.
- sunshine_melLv 74 weeks ago
You'll only get the 250k you actually need to buy the house. This goes directly to the seller; you don't ever see it.
300k is the maximum you can borrow; not the amount you'll get.
- StephenWeinsteinLv 74 weeks ago
You do not get any money. You don't get 300K or 250K. You get 0K.
The money is comes in the form of a check to whomever is selling the home.
It does not come in the form of a credit card.
- Anonymous4 weeks ago
There is no money "left" on a home loan. Unless you get a HELOC or something. And that will be dependent on the purchase price. If the house value is $260k you are not borrowing $300k.
A home equity line is usually maxed out a percentage of the value. And its usually for people who have substantial equity.
Teenage unemployed flipper troll with no credit? You won't be getting a mortgage anytime soon.