Instant Equity buying far below appraised vaue

[Ryan K.]

I'm looking to buy  a home that appraised 1 year ago for 100K. The seller owes 65K on the mortgage. I want to get a conventional mortgage for the 65K, and wipe out the sellers mortgage. If I did this, would I have instant equity in the property? 

Then I plan privately draw up paperwork with the seller and RE attorney for the remaining amount (we've privately discussed the actual amount, (90K), so I don't have to get a higher mortgage. 

If I follow this plan, would I have instant equity, or would the bank not allow that? Also, would the bank allow me to buy a home so far below the appraised value?