Questions about mortage

[Mastewal Gezahegn]

Hi, My name is Mastewal (pronounced "mast-a-wall") Gezahegn (pronounced like design with a G). Now that we got that figured out. I had a couple questions I was hoping the brilliant posters on here could help me with.

1. If I am pre-approved for a 200k home but If decide to buy a duplex worth 150k would I be able to use the remaining 50k for some TLC.

2. If so are can you think of any pros and cons to this method?

[Chris Mason]

Hi @Mastewal Gezahegn,

Welcome to BP.

1) Generally, no. That would be a renovation mortgage. Those do exist and are a thing, but otherwise no you cannot be lent more than the purchase price with a vanilla mortgage. 

2) Sellers have to be OK with a slower closing than would otherwise be possible, if you purchase using a renovation mortgage. The entire project, including what all that extra money you are lent is going to be spent on, needs to be underwritten.