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Benefits of Mortgaging a Bank Foreclosure
- Mortgage less than the home is worth as the home is worth more
than the sales price.
- Very often the mortgage company that originally foreclosed on
the home will hold the mortgage on your purchase for a lower interest
rate in order to get the property off of their books.
- By getting pre-qualified before you begin the purchase you will
save yourself a great deal of time and anxiety.
There are down sides when buying Bank
Foreclosures
The most difficult and time consuming purchase is a bank owned
property as it requires that you do your own research and compile
your own data. There is generally no information for the condition
of the inside of the real estate in question and the possibility
of entering is highly doubtful as the tenant/owner is normally not
very hospitable to the idea of you evicting them from their home.
The financial risks of buying a Bank Foreclosure
You must be prepared to finance the rehab of the property as the
condition will not be readily available to you, as access to the
property is not guaranteed.
Your deposit is at risk if you are not able to obtain a mortgage
within the 30 day time frame that most mortgage companies allow
after you have successfully won the bid on the real estate. Most
Bank REOs have a third-party manager who is responsible for the
upkeep of the property while the bank owns it, and they are your
liason with the bank. Offers must be made through them, and they
will relay counter-offers from the bank. In general, banks do not
negotiate much on prices, so if you offer less than asking price
be prepared to go through the negotiation process several times
for a minimal discount.
USHUD.com obtains its bank REO lists from the following sources:
Bank of Ocwen (Residential ,properties, Bank of America, First Union
Bank (Property Finder)
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