Home equity loan on property bought at auction


#1

I bought a property at a foreclosure auction and plan to live there as my primary residence. I want to take a home equity loan on this property in order to pay back people who loaned me cash for the auction. For the purposes of getting this loan, will it be problematic that I only have a trustee’s deed and not a grant deed or warranty deed?

I called my bank and they said that they would need title insurance in order to approve/finalize the loan. I thought you couldn’t get title insurance for a property bought at auction. Any ideas for how to get a loan on a property bought at auction?

-Tara


#2

You can purchase an owners policy at the time that you attach the loan. The bank just wants to make sure there are not any clouds on title. Select a title company and have them issue a preliminary title report. This will show if you are abel to get insurable title or if there are potential title issues that need to be resolved.