Home equity loan, how soon can I get one?

Question

I'm looking into purchasing a condo at 25% of it's assessed value. I'm pretty sure it will need some work, and I'm sure I can't refinance right away, but is there a grace period for getting an equity loan, or can I do at the same time as closing, or pretty close to it?

I'm looking to pull $25 - $30k out to fix the place up a little.

Any other options?

Answer 1

You are probably looking @ 12 months in the home. There are really no other options since they will go off of the purchase price & not appraised value of the home.

Answer 2

if you plan to live there then an FHA203K loan for rehab may be something to look at. But you will need a contractor and plans and quotes to do it.

I am a mortgage banker in TN & KY

Answer 3

I would advise you to seek out a purchase/rehab loan (e.g. 203K for a primary residence, FNMA Homestyle for 2nd home or investment property, etc.). That way you can finance the purchase and the improvements at the same time. Chances are if it needs that much work, it would not be lendable in its as is condition anyway.

Home equity loans might be an option, but I think that would be a little riskier unless you can line it up ahead of the purchase. Check with some local banks to see what they have. Ask if they can lend "subject to repairs" if they are needed to make the condo habitable/average condition.

Good luck.

Answer 4

If you pay cash, you can get a loan the next day.  If you finance it, you can get a new loan but the purchase price will be used to determine the amount of the loan.  You can't get a new appraisal and borrow more until 1 year has passed.