Pros And Cons Of Buying A Foreclosure Home
Many home buyers believe that buying a foreclosure home that they can get a major bargain. This may be so in some cases, however, buying a foreclosure home is not always a deal. A foreclosure home is when the mortgage lender goes through the process in foreclosing a home where the mortgage loan borrower defaults on their mortgage. The homeowner may turn in the keys to the mortgage lender and do a deed in lieu of foreclosure where they voluntarily give up the deed to their home to their mortgage lender so the mortgage lender will not foreclose on their home or the mortgage lender can go through the foreclosure process where they can evict the homeowner due to defaulting on their mortgage note. Once the foreclosure process is complete, the mortgage lender goes through their due diligence and seek consultants to price the home to list on the market. Many times foreclosure homes are in bad shape and there are times where foreclosure homes cannot be financed because they are not habitable. Regardless, mortgage lenders will try to get the most money they can from foreclosed homes and many times buying a foreclosure home is like buying a regular home at market price. There are pros and cons of buying a foreclosure home. Again, there are times where you can get a deal in buying a foreclosure home if the home is trashed and needs a lot of work. The cons in buying a foreclosure home is that it may take longer to close than a regular home because you are dealing with the mortgage lender. The mortgage lender is the owner and seller of the foreclosure home.
Buying A Foreclosure Home That Needs Work
Many foreclosure homes may need a lot of work and standard financing may not work. Buying a foreclosure home that is stripped such as needing a new kitchen, bathroom, HVAC, millwork, or a home that squatters were living in can be done with a FHA 203k Loan. FHA 203k Loans are acquisition and construction loans all in one loan where the mortgage lender will give you funding to purchase the property and the funds to rehab the home. There is one appraisal that is required, as is appraisal and as complete appraisal. The home buyer needs 3.5% down payment on the after improved value of the property for FHA 203k Loans. The two types of FHA 203k Loans available are FHA 203k Streamline Loan and the full FHA 203k Loans. The FHA 203k Streamline Rehab Loan limits the construction budget to $35,000. You cannot do room additions or structural changes to the existing home with the FHA 203k Streamline Rehab Loans. The full FHA 203k Loan, there are no construction limit and structural changes can be done and room additions are permitted.
Buying A Foreclosure Home With 203k Loan
One of the greatest benefits of buying a foreclosure home with a FHA 203k Rehab Home Loan is that you can buy a fixer upper with a acquisition and construction loan with only 3.5% of the after improved value of the property and customize it your own way. With a FHA 203k Rehab Home Loan, you can do a complete gut rehab or even a tear down and build new with the choice of your own furnishings. If you are interested in buying a foreclosure home with a FHA 203k Loan and need a FHA 203k Lender, contact me at 262-716-8151 or email me at firstname.lastname@example.org. We are available 7 days a week, weekends and holidays included to serve your needs and answer all of your questions.