If I purchase a foreclosure for 270 and the appraiser says its worth 320. After i put down 20 percent for the purchase at 270 can i take out the extra equity up to 80/20 loan value. How do i go about taking out the extra money
270 ×.20 =54
No. Lenders will lend up to the lowest of the sales price or the appraisal price. If you offer 300 and the appraisal is 320, the lender only lend up to the max % of the sales price. The % depends on the loan type (conventional vs Fha, etc).
what Christopher says is true to some extent, private money lenders will look at a recent appraisal especially when you have cleaned up the foreclosure and if its rented. Banks arent willing to lend based on appraisal they look at the purchase price.