What To Watch Out For When Purchasing A Foreclosure Home?

Foreclosure homes are very enticing BECAUSE of their area and price. However, one thing foreclosure companies are notorious for doing is dropping the price low to intice a bidding war between buyers.

The first thing to ask your mortgage lender is which of these three types of loans do you have:

1) FHA
2) VA
3) Conventional

If you have an FHA or VA loan, the house must be in pristine, move in condition. Both of these programs are government backed loans. The only exception to this rule is if you have a FHA construction loan, which is rather rare in this market climate. Your mortgage brokers FHA / VA appraiser will be able to tell you the qualifications for FHA / VA loans.

If you have a conventional loan, the criteria will be less strict because the loan is coming from a private party or a corporate lending institution, in most cases. But you will need to find out what your lenders specific qualifications are.

All foreclosures are listed with Realtors, and all Realtors are required to recommend that you obtain a home inspection. As a matter of fact, you have to waive your rights to a home inspection by signing a form if that is your choice. But it is strongly recommended that you obtain a home inspection. All lending institutions require that you have a termite inspection.

The cost for a home inspection can range between $200 to $400 dollars, and termite inspections are between $150 to $250 dollars, depending on the size of the home.

We all wish it were as easy as driving through the neighborhood with some high powered x-ray goggles. That would save all of us a lot of money! But the truth is, you never know what you are going to get when you purchase a house, and this is especially true for a foreclosure. And since purchasing a home is one of the biggest financial investments you will ever make in your lifetime, spending a little extra to make sure you aren't sinking your funds into a money pit is well worth it. And of course, some lending institutions require this measure before they will back you on purchasing the home.

But even if you are spending cash, do not skip this important step!

Hope this helps!

Call or text Rose Wilkinson @ 405-881-5958