Home equity loan on a foreclosure (home loan, credit, requirements, properties)

[GirlFromJersey]

I've seen a lot of posts here about home equity loans and how the equity you can take out is usually the amount that you put in as a down payment. But what if you buy a house as a foreclosure and paid much less than what it's worth? Would the equity you could draw on be the amount that you paid at the sheriff sale or would the bank do an appraisal and go from there?

[pghquest]

Originally Posted by GirlFromJersey

I've seen a lot of posts here about home equity loans and how the equity you can take out is usually the amount that you put in as a down payment. But what if you buy a house as a foreclosure and paid much less than what it's worth? Would the equity you could draw on be the amount that you paid at the sheriff sale or would the bank do an appraisal and go from there?

It depends on

1) the seasoning requirements of the bank, (i.e. how long they want you to own the home before they let you "cash out").
Some will allow you to get the equity loan the same day, others want one year.
2) Your credit
3) Rational reason why you obtained the property cheaper then the appraised value.
4) Sometimes, income from the property.

What banks are concerned about is primarily a buyer cashing out, and fleeing with the money, and second, overly appraised properties that are made up, for the sole purpose of helping to cash out.

[sathyan]

It all depends on the re pay ability of the customer.if you can provide the confidence of staying genuine with proper payment and also a security for the loan then it will be easy to get the loan.you can also visit the link below.
----
sathyan

Home Loans