Pre approved for a lower amount, but putting down cash...

[Brittany Olofsson]

So I am a newbie investor. I am closing on my first SFH in 2 weeks. Another SFH with MIL has come on the market and I'm very interested. My lender has stated I am pre-approved for $180,000, however this property is $243,000. Am I able to pay the difference in cash to bring my loan down to 180K and still get financed?

[Winston Covington]

Hi Brittany.  The question is whether you were pre-approved for a purchase price of $ 180,000 or a loan of $ 180,000 ? I'm going to assume that it was for a purchase price of $ 180,000 which for a non owner occupied loan, you will need at least 20% down.

That would leave you with a loan of $ 144,000 and a down payment of $ 99,000 to complete your purchase price of $ 243,000.  If you were approved for a loan of $ 180,000, then you would be ok to make the down payment of $ 63,000.

* Note * Check with your lender to find out what cash reserves will be required for your purchases. Lenders are requiring anywhere from 6 to 12 months of payments in reserves for each property in your portfolio as an investor.