Equity loan after purchase

[zornundo_IHB]

Is it possible to obtain a home equity loan or a HELOC shortly after purchasing a home? Would a lender look at the appraisal as the home's worth or look at the sale price?



I only ask because we are purchasing a REO and there is a large discrepancy between the appraisal and the sale price. The appraisal exceeds the sale price by a good 50% (sale price is $79,900 and appraiser just appraised the thing for $125,000.) The home does need some work, so this wouldn't be a MEW just to go blow money on BS stuff like a vacation or a car. Needs new HVAC, water hookup, fix a retaining wall, and other numerous little things.

 

[SoCalGal_IHB]

For the first 12 months of your ownership (called "seasoning"), the lender will use the appraised value or purchase price, WHICHEVER IS LESS, to calculate the LTV (loan-to-value) or CLTV (combined loan-to-value). Here's a further explanation.



Do Mortgage Lenders Recognize Bargain Prices?

http://www.mtgprofessor.com/A - Qualifying/do_lenders_recognize_bargain_prices.htm