Q: I plan on buying a house in the next year or two, my question is if I get approved for $70,000 but the house only cost $55,000 can I still get the full amount I am approved for and use the difference for home improvements?
A: On most loans, no. There are certain mortgage products that might (sort of) let you do this (FHA has such a product) but with the mortgage industry going through major problems in this economy, they are becoming non existent. Some people, refinance after a year or two, then take the excess left over after paying off the original loan to do what they wish. Others, take out a home equity loan, having 2 mortgages on the property. Keep in mind, the property must appraise to meet the equity guidelines set by the lender.