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If a Building Appraisal is Higher Than the Purchase Price, Can I Borrow Against the Higher Appraised Value?

If a Building Appraisal is Higher Than the Purchase Price, Can I Borrow Against the Higher Appraised Value?

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If a Building Appraisal is Higher Than the Purchase Price, Can I Borrow Against the Higher Appraised Value?

Question – I have the opportunity to purchase a building next door to our current facility at a significant discount to what I believe it’s worth.  If the appraisal is higher than purchase price can I borrow additional money through that additional equity?


 

Our Response –  In most cases the answer is no. Having additional value in the building is great but most banks will only lend up to the sales price. Banks will however, typically allow a refinance on property two years after purchase at which point they lend against the appraised value.

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

If a Building Appraisal is Higher Than the Purchase Price, Can I Borrow Against the Higher Appraised Value?

If a Building Appraisal is Higher Than the Purchase Price, Can I Borrow Against the Higher Appraised Value?

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