Financing Foreclosure Purchases

It costs less than you would think to finance foreclosure purchases. With good credit, many banks will loan the full price of the home foreclosure. Some foreclosed properties include special financing with as little as $500 down. If the home is to be used as a rental, banks often require only a 10% down payment. If you have a large amount of equity in another home, you may get a line of credit from your bank to purchase a home foreclosure.

HUD properties are available for sale to both homeowner-occupants and investors. You can only buy HUD-owned properties through a licensed real estate broker, whose commission will be paid by HUD.

Down payments vary depending on whether the property is eligible for FHA insurance. If not, payments range 5% to 20%. When the property is FHA-insured, the down payment can go much lower. Each accepted offer must be accompanied by an "earnest money" deposit equal to 5% of the bid price, not to exceed $2,000, but not less than $500. The Federal Housing Administration 203(b) loan program provides low-rate mortgages to buyers who make a down payment as small as 3%.

Understanding Home Foreclosures

The Foreclosure Procedure usually begins after a borrower has skipped three mortgage payments. Although the outlook may seem bleak, Avoiding Home Foreclosure is possible, and paramount because it can seriously affect your ability to qualify for future credit on major purchases, not just housing. Explore ways of rescuing your home, and the benefits and risks of Home Foreclosure Loans.