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How do loans work when someone wants to renovate?

I have a question that for some reason won’t leave my head. I’m 22 years old so I haven’t bought my first home yet but say someone gets approved for a $300,000 loan. I’ve seen a lot of people buy something for $200,000 and then stick $50,000 into renovations. My question is, does the bank put that on the loan? I just can’t imagine someone having $50,000 lying around for renovations when buying a house. I’m just curious if the loan would be made for say $250,000 even though they are paying 200 for the actual house. Can someone help explain how it works to me?

submitted by /u/JawlessMuffin
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source https://www.reddit.com/r/RealEstate/comments/i1klx2/how_do_loans_work_when_someone_wants_to_renovate/
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