Asked by Tony  |  Submitted December 17, 2013

If I can, should I try to borrow more money than I need in my mortgage so I walk away from my closing with cash in my pocket?

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  Answers  |  2

December 19, 2013

Hi Tony, this is a matter of preference; on a purchase you can do a lower down payment and keep the money you would have spent lowering the loan for a rainy day. However, this comes at the cost of a higher rate, higher payment and in some instances higher cost. Some folks prefer to pay more upfront and have lower rate and mortgage payment.

My suggestion would be to compare the rate, cost and mortgage payment between the different down payments and see if the investment in lowering the loan upfront is worth the payment.

$commenter.renderDisplayableName() | 08.18.17 @ 10:59


February 06, 2015

The answer to your question depends on many factors, Tony. How much equity do you have? What will you use the funds for? How likely are you to use the cash to pay down debt, and then run the balances back up again? Equity is a particularly big piece of the equation, since cash out refinances are limited to 80% of the value of the home. In addition, cash out refinances have pricing adjustments that make the loans more expensive than "rate/term" refinances. IF you have equity,, and IF you really have a legitimate purpose for the funds, then your answer may be yes. As far as "getting some money just to get some money", the answer is likely no. Remember, the house payment goes up the more you borrow!

$commenter.renderDisplayableName() | 08.18.17 @ 10:59


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