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What happens when the appraisal is more than the sales price?

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It's possible for the appraised value of your new home to be slightly different than what you're paying for it. If your new home gets appraised for more than the purchase price, it won't change the amount you borrow. We look at sale prices and appraisals, and use the lower of the two to determine how much of a down payment you need to make. Appraised values can't lower down payments and you can't apply the difference.

But here's the good news: If your new home appraises for more than your purchase price, that's instant equity. You immediately own more of your home on Day One. It also means that all the work you did in the early stages of prequalifying paid off. You can feel confident that you'll be “above water” when you move in.