HUD Properties

Buying a foreclosure home

Foreclosure homes have become a major segment of the home sales market. For many home buyers, purchasing a foreclosure property means buying a Great Deal. As with any home, buyers should be informed about the price, the neighborhood, and the condition of any property they are considering to buy.
Another important consideration about purchasing a foreclosure home is the available financing. With financing, not every foreclosure property is equal. Buyers should be aware what lender owns the home, and if there are any special financing options available.
Most foreclosure sellers do not offer special financing. Sometimes it can be difficult to purchase a foreclosure property, especially if there are condition issues. If a property has deferred maintenance, a new lender may not be willing to make a new loan on the property. Foreclosures are always sold “as is” and without repairs. This means that if the appraiser requires repairs to be done prior to the closing of your loan and your lender will not escrow for the repairs, you will not be able to buy the property. I do not know of any foreclosure seller that will allow a buyer to make repairs prior to closing and almost never will the seller make repairs.
FHA offers a great HUD foreclosure program. Regular FHA loan terms apply, which means the buyer can take advantage of the exceptionally low interest rates that FHA offers. Depending upon the severity of the repairs to the property, FHA may allow you to escrow for repairs. Please refer to a blog I wrote months ago about insured and uninsured properties.
This is one of my favorite loan programs in regards to foreclosures. You can search for a HUD Home here .
FNMA offers special financing with their HomePath program. These loans feature low down payments. One feature that many buyers like is that the loan does not have mortgage insurance. This is true but the interest rate tends to be a little higher.
FNMA also will allow after closing renovations, which can be an excellent option for someone purchasing a HomePath home.
Understanding your financing options is an important part of any home purchase decision. And it is especially important for those home buyers who are considering purchasing a foreclosure home. Some loan programs simply will not work with a foreclosed property. I strongly recommend not using a VA loan on a foreclosure property.
If you have questions regarding real estate please call me at 405-213-2992 or visit my website http://www.sandiwalker.net

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s