Obtaining A Loan To Buy A Foreclosed Home
(The following is a guest post)
Due to the recent financial crisis and housing market crash, there are a number of foreclosed homes available for purchase in a number of cities across the country. These homes may be in excellent shape and primed for someone to move in immediately or need some renovations done to return the home to its previous safe and secure state. People that wish to obtain one of these foreclosed homes have a number of options available for getting a loan to purchase and fix up the properties. Here are some tips for obtaining a loan to buy a foreclosed home.
Know What You Want
With various types of mortgage loans available on the market for obtaining a loan for a foreclosed property, it is important to have some idea of what type of loan you are looking for before you begin contacting lenders. You must first decide what you will be doing with the loan. For example, a FHA 203k loan available from lenders like Prospect Mortgage allow you to roll the amount needed to perform renovations on the home into the loan amount so you will have the money available to fix up the home immediately. There are also a wide range of loan terms to choose from that will affect the overall price and length of the loan by a significant amount.
Explore Your Options
Once you have decided what types of loans you would be interested in, you should explore your available options to ensure that you are getting the best priced loans for your needs. Programs like the Fannie Mae Homepath program will help homebuyers determine which loans are right for them by providing a number of options that may be better than what other lenders may be offering. Homes purchased through the program can have a value as low as $60,000 and the buyer can put down as little as 3% of the total price as their down payment on the home.
Choose A Reliable Lender
Your choice of lender will be a key decision in obtaining the best loan for purchasing a foreclosed property. The lender chosen should have a simple to understand application process and be able to assist you with any questions that you may have during the application and review process. The lender should also be able to provide you with a decision on your loan application within a reasonable amount of time and provide you with documentation explaining all of the fees and charges that you will pay for the loan if your loan request is approved. If the lender you have chosen is proving difficult to work with, it may be best to cut your losses and begin anew with a lender that you will be able to work with effectively during the entire time that your mortgage loan is in effect.
A lot of foreclosed homes have substantial damage now that they’ve been empty for several years. We’ve had water damage, animal damage, and even structural damage in our neighborhood.