Foreclosure in 19560>Question Details

Theemperorsm…, Home Buyer in 19560

Can I get a home equity loan on a home bought at auction? What would that entail?

Asked by Theemperorsmom, 19560 Tue Nov 15, 2011

My husband and I are looking to buy a home at auction. We anticipate it costing ~$4000. The home has an estimated value of ~$90,000. We are prepared to need to renovate. What issues might we have with getting some sort of loan for renovations? According to the website, we will be EQUITABLE owners the day of the sale, but the deed will not be recorded for 4-5 months. Would we need to wait that long to secure a loan? Thank you for any help!

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What you are describing is difficult but not impossible. Three areas that are probably going to be an issue, the purchase price, and lack of experience and loan size. A home of that value would not sell for that little at auction in my area, if it does it is an indication it should be torn down. You indicated it needs rehab, but did not specify what type of auction, however, what you are describing is not something most homeowners have experience doing. Finally, loan size, permanent financing might be tricky, our minimum loan for example is $50,000. Home this is helpful.

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0 votes Thank Flag Link Tue Nov 15, 2011
Hello The emporersmom,

Some banks have seasoning requirements and some do not. I do not do home equity loans but refer them out to the local banks depending on the situation. There are some lenders that do not have a fee for doing home equity loans and may do a desktop appraisal which is not based on the purchase price. Knowing who to ask and what to ask you can save a lot of time. I'd be happy to refer you to some of those lenders.

Best Regards,
Alan Openshaw
Cornerstone Lending
Southampton Pa
267 992 7276
0 votes Thank Flag Link Tue Nov 15, 2011
I think the prior agent is correct - speak to the potential lender. While condition of the property will be important, there are loans available for renovations of all types. In this current lending environement, until you have clear title to the property a lender will be somewhat reluctant to allow a disbursement of any monies for renovation until you can prove clear title, not just equitable ownership, as I am guessing you suspected. So perhaps you can have everything lined up, ready to go as soon as you have clear title. If you need suggestions for where to go or whom to speak with, let me know, I also build new homes in Temple.
0 votes Thank Flag Link Tue Nov 15, 2011
Most lenders have a "seasoning" period whioch is 3 to 6 months fom when you close until they will (re) finance the property. equity loans are rare these days and have a different set of criteria. You should start by meeting with a local and trusted mortgage broker, they can prequailify you at no cost, they will look at your credit plus your financials and let you know if there are any programs that you may quailify for given your situation.…

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0 votes Thank Flag Link Tue Nov 15, 2011
Speak to a lender, Condition of the home being auctioned will play a major part in the answer. Starting with is it in livable condition:)
0 votes Thank Flag Link Tue Nov 15, 2011
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