Mortgage amount higher than promissory note. wait...what?

[Jamison Schweitzer]

Hi everyone - I recently purchased a property and at the closing table I noticed that the amount on the mortgage was significantly higher than the promissory note.  I've never experienced this before. They've always been equal. I talked to another investor who experienced this as well, at the same bank.

I have a couple questions: 1) Why and how can a bank collect more than what is owed to them in an event of foreclosure and 2) does this inflated amount recorded on the mortgage lock me out from accessing the equity in the property, if for example I'd like to add a 2nd lien, cross-collateralize the equity or cash out refi someday?

In this specific case I bought the house for 45k, my note is for $65k, the mortgage is $81k and the property appraised for $85k.

Thanks in advance for your comments!

Jamie

[Martin Willard]

The amount on the closing disclosure cannot differ by more than 10% than the amount you close for so go back and look at the paperwork they sent you.  Also, if you're still within 3 days of closing you can tell them you want to back out.  I would probably do both- double check the numbers and if they're jerks about helping you through it, threaten to pull the deal.