I am in the process of buying my second home and taking out a home equity loan to use as my down payment. I will take out 80% to pay off the remainder of my first houses mortgage and keep it as an investment property then use around 125k as a down payment on my new home of 350k. But my offer I put in said cash at closing is 200k...can this number change? My offer was just accepted so we are very early in the process and I want to use some funds for renovations. I have the full amount of 350k for the loan I just want to change the cash at closing(down payment). I am sure this has happened many times and honestly as long as the seller knows I am approved for the full loan it should be fine right? In Colorado for reference.

  • 4
    Can you explain why you're taking out a home equity loan to pay off a mortgage? Kind of a shell game where your prize is a higher interest rate.
    – Hart CO
    Commented Apr 26, 2021 at 1:12

1 Answer 1


This is a material change in the offer and may result in the seller backing out. Your $350K approval may also have been based on a $200K down payment, so that may mean your lender backs out.

The first thing I would do is ask you lender if you can do $125K down, if they agree get the loan approval modified and then see if the seller is willing to change terms. The current housing market may mean that they have a better offer, so be prepared to have it rejected. Also changing the terms of your loan may send it back through underwriting, you may have to ask for an extension.

  • Good answer. Put yourself in the seller's shoes and ask what the seller would like to see in order to say "Sure, that's fine." E.g. if you provide the home equity loan paperwork along with a bank statement, the seller could get comfortable with your changes. Commented Apr 26, 2021 at 16:09

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