Buying a house can be stressful enough, but without having your questions answered, it could be a lot worse. Are you able to pay more for a house than the appraised value? Should you? Would you even want to? This article outlines what happens when you’ve placed a bid on a house but later find out that your approved loan amount will not cover the entire cost of the home. It also provides tips and tricks on what you could do when presented with this situation.
- Lenders who borrow money to people will depend on the appraised value of a home. If the appraised value is lower than expected as collateral, they will refuse.
- The appraised value is King because if the lender is only giving money for the appraised value, then the homebuyer has to use his own cash.
- Buying a home at a price more than the appraised value might not be a wise short-term decision except one wants to have the home on the long-term.
“The bottom line is that you can purchase a home for more than the appraised value. The larger issue is whether it makes sense to do so or not.”