How to Find a Lender to Finance a Forclosed Property

By: Jonathan Heusman

Every potential homeowner has different needs when it comes to a mortgage. Whether fixed, or variable - or dependent on the term, there are certain types of lenders that are better for certain situations. Does finding a lender have anything to do with a property that has been foreclosed upon? Are there any other specifications that the lender should know about the property? Will the buyer have to provide any additional information? Here is some information that should be taken into account when purchasing a home that has been foreclosed upon, and finding an appropriate lender.

Upon first meeting with the lender they should be attentive and understanding to the needs of the client. Ensure that all required documents are present and the history is accurate, as well as the information about the foreclosure. When purchasing a foreclosure it is necessary that one acts quickly.

Many buyers go into the deal thinking that since it is a foreclosure the process is expedited. Often, this is not the case. With a foreclosed property the documents and time required only increase. Often, the closing date can extend much further than the general thirty to ninety days.

Many lenders are willing to work with an individual to purchase a foreclosed home because of the affordability within the home. Sometimes, there are homes being sold through foreclosure that individuals would otherwise be unable to afford. This factor makes it attractive to the first time buyer wanting to create equity within a home from the moment of purchase.

The most important aspect of finding a lender to finance the home is time. The foreclosure and purchasing progress may happen quickly and although there may not be a vast amount of time between the time an offer is made, and the time that it takes to get pre-approved for a mortgage, it is important to compare interest rates between lenders. Some interest rates can differ as much as three percent. When it comes to something as large as a home - which is one of the major purchases that a person will make in their lifetime - this aspect could save you thousands and thousands of dollars.

Ensure that a competitive interest rate is obtained and the home has been inspected - the lender will appreciate both of these facts and more than likely willing to work on a deal with the buyer.

At times, lenders will offer lower interest rates because of the price of the foreclosed homes. Ask your lender about this option, and the lowest interest rate that they can extend to you. Ask the lender about closing costs, and mortgage insurance. Many lenders will omit these costs if the buyer is purchasing a home that is in foreclosure.

There is hope even for those with bad credit - or very little credit. When purchasing a foreclosed home - the buyer is doing so for a fraction of the market value. Many banks are willing to take a chance, because of the sheer value on the home.

Finance
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