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.