The foreclosure market offers plenty of opportunities for investments. An investor or a potential homeowner stands to save money by buying a house that has been taken over by a lender or bank. Purchasing a foreclosure house is quite different from acquiring a traditional home, hence plenty of research and patience is required during the foreclosure home purchase journey.
Here is a number of dos and don’ts when getting a mortgage to purchase a foreclosure house;
- Get preapproved for a home loan before you can start the purchasing process. Getting preapproved makes you a more attractive buyer and gives you more negotiating power.
- Set aside some money to do some repairs. If you are willing to buy a foreclosure house, know you are purchasing it as-is. Keep in mind the repairs will cost roughly 10% of the house price.
- Have a maximum spending amount in mind. The bank selling the property will want the highest price, and you can, therefore, expect a counter offer from the bank. It helps to have a price ceiling.
- Do not select just any lender. Select a lender that has experience working with foreclosure homes. Since the process is different, failing to follow the guidelines can delay the process resulting in fines or even your offer falling out of escrow.
- Don't be impatient. Remember the escrow process for foreclosure homes is longer. Also, banks will tend to use non-local escrow companies which might lead to obstacles in the process and longer than expected timelines.
Purchasing a foreclosure home might be different from the traditional home purchasing process. If you plan on getting a mortgage, contact Midland Mortgage Corporation for more information.