How do I get a mortgage if I want to buy a foreclosure?
Question:
Answer:
Ifyou go to your banker or to a mortage broker and see about getting preapproved and let them know your intentions and see if there is a program that will back you in your purchase ...
Good Luck!
You need the downpayment,and a pre approved loan,with a 30 day escrow or you pay huge interest till you close.Also,the inspection might not pass,holding up loan,foreclosures are as-is
You will absolutely need the 10% down on auction day. No bank or mortgage company will lend you this on the subject property because you will lose it if you back out of the transaction for any reason. If you have equity in your home, you can borrow the 10% on that. If not, you may be able to get an unsecured loan from a bank if you have stellar credit. The only other options are hard money loans and credit card cash advances. Both of these options will cost you a bundle but may be worth it if you will make enough in the long run.
Buying a foreclosure is not the simple road to riches that infomercials present it to be. If the property is worth a lot more than the loan amount, there will be a bidding war at the sale. There can be problems with title, liens, etc. The repair costs can be much higher than anticipated because you cannot do an adequate inspection. If you do not have the money to lose, it is not always a great idea to jump into this arena.
Good luck.
First, be VERY CAREFUL about buying at an auction. You will be bidding against a small group of people (sharks, really) who do this for a living and who enjoy making people like you over-bid on property. They DON'T want you coming back and weasling in on their livelihood.
Second, make sure you understand the rules of buying in your county. In many California counties, you must pay a non-refundable deposit just to bid, and you must pay 100% of the winning price ON THE SPOT.
Third, you will have no warranty whatsoever. You get the house as is, including TAX LIENS that may be associated with the property, and any liens that are senior to the one you're buying from.
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