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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 10433
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Sister buying a house, the bank told her she was approved.

Customer Question

Sister buying a house for 60k, the bank told her she was approved for 90k. Does this mean she can get more than the 60k and use it toward fixing up the house?
Submitted: 9 months ago.
Category: Finance
Expert:  PDtax replied 9 months ago.

(Disregard. Thank you.)

Expert:  PDtax replied 9 months ago.

(Disregard. Thank you.)

Expert:  Lane replied 9 months ago.

Hi, Different expert here

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The answer is yes, IF, the bank will completely FUND the amount.

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If they have already seen the house appraisal, so that they've based this on the level of security provided by the market value of the home then yes, it's a done deal, AND the amount used to improve will be (the interest ON it) deductible as well.

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If the appraisal hasn't BEEN done yet, then this could be what's called a pr-approval, and they may either (1) want documentation that the improvements are going into the house OR (2) not offer the full 90,000

Expert:  Lane replied 9 months ago.

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I hope this has helped.

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Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd really appreciate a positive rating (using the rating request, faces, or stars on your screen)

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That’s the only way JustAnswer will credit us for the work here.

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Thank you!

Lane

I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.

Expert:  Lane replied 9 months ago.

If I've not addressed something OR you have additional questions on this, let me know

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And again, what you might want to do is have your sister call and ask if this was just a PRE-approval or if that's the amount OF the loan.

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Let me know

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Lane

Customer: replied 9 months ago.
The bank called and told her she was pre approved for 90. I don't believe that an appraisal has been done yet but that they may have info on the house from the owner. The owner is selling to her at what he has left owed, about 60k. I believe the house to be worth anywhere between 90 - 120 maybe more.
Customer: replied 9 months ago.
She's wondering if since they offered the 90 can she get 90 or will they only give her what the house is being sold to her for
Expert:  Lane replied 9 months ago.

She can get the 90K base on what you've said here.

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I would really appreciate Your positive rating … (by using those the stars or rating request on your screen)

Otherwise I'm working for no crediting at all here.

Customer: replied 9 months ago.
Based on which part?
Expert:  Lane replied 9 months ago.

Based on the house being WORTH 90K or more.

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Many times a bank will PRE-approve based on credit, but then when they find out true market value (that if the house were sold in foreclosure it wouldn't GENERATE a 90K sales price) they will only loan up to the value of the house.

Expert:  Lane replied 9 months ago.

But HERE, the house is worth the 90K, that's the bot***** *****ne. That's what the bank cares about (the collateral for the loan).

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I hope this has helped.

...

Please let me know if you have any questions at all.

...

If this HAS helped, and you DON’T have other questions … I'd really appreciate a positive rating (using the rating request, faces, or stars on your screen)

...

That’s the only way JustAnswer will credit us for the work here.

...

Thank you!

Lane

I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.