Do you have to have money to put down on a hud/forclosure home?

Question

if i wanted to buy a forclosure or a pre forclosure would it still be the same process of approval of a morgage on a home that isn't in forclosure? do you have to have better credit to get into a forclosure? most of all do you need to put down anything? my credit score is 620 and i claim that i make 50 a yr. thanks for any info

Answer 1

In this market money is getting tight down payment pretty much is the rule 3% for FHA and 10% for Conventional.

However with better credit there are still very few programs that offer 100% financing. There are also programs like nehemiah, ameridream or bullfrog that are seller participating programs that give tax incentives to the seller for crediting down payment and closing cost  to the buyer.

Get your self a very savy and informed mortgage broker and he will guide you and your agent how to make the offer to utilize one of these programs.

First you need to check into your credit and find out why your score is low at 620 your intrest rate at the current rate will cost you  around 7 to 7.5% 30 more points added to your score can make a difference of .75 to 1%.

Get rid of store credit cards they will drive your score down because they report your balance owed as the limit even if it is not. Your score goes down for every card at or above the limit.

Closing these accounts will ding your credit but in a few months the difference could be that 30 points you need.

As for the other cards consolidate to a low intrest card and pay them off. Pay off all the lowest balances first and put away the cards and don't use them. Gas company cards are also not always credit report friendly.

Find a mortgage broker that can help you specificly to increase your score.  good luck!

Answer 2

In theory, it is the same process to buy a foreclosed house as it is to buy a regular house. However, foreclosures are sometimes sold by auction, and they usually have immediate posession so someone that does not need a mortgage can snap up these properties quicker.  They can just walk in pay cash, get their house.

You "claim" that you make $50k a year?  Do you mean that is the amount on your tax return?  

If you mean that you 'told' the mortgage company that you make $50k/year, but you really don't -- thanks for the good laugh.  The mortgage company will verify your income.  Just because you typed in some amount into an online Mortgage Calculator does not mean they will give you a mortgage.  You will probably have to show tax returns from the last 2 years; verification of your current employer and wage (where you will have to had worked for likely the last 2 years at least); verification of any other credit cards and loans, etc.

Answer 3

FHA loan requires at least 3% ccontribution towards down payment and settlement costs. Your credit score should be high enough.  Feel free to email me, if you want more info.

Answer 4

Average credit score in America is 720.  Under 620 is the definition of "horrible".  You don't pay your bills on time.

You can buy any house in the exact same way.  You put some money down and get a loan for the rest.  Easy.  The bank wants the house to have a stove, dishwasher, no holes in the walls,  swimming pool full with clean water, and no wires hanging out of the walls.  All repo houses have no stove, no dishwasher, pool is empty or green ,  wires everywhere, fist holes in the walls.  So that is a problem.  

You may need to buy a nice house this time and go for the repo next time.  Unless you find a pretty repo.  It's possible.