How To Get Financing For Foreclosure Auction

Megan

9 May, 2019

For those who are new to the auction block there are a few key pieces of financing knowledge that are must haves to remember before lifting that paddle to bid. Those who decide to get a mortgage have 30 days to obtain financing before closing she adds.

Buying Foreclosures At Auction The Basics

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Mortgage rates types of mortgages offered requirements for loans.

How to get financing for foreclosure auction. A few states allow you to pay a percentage at auction and the rest within a certain time frame. In nearly every state youll have to pay in full immediately following the auction of the property. You can buy foreclosures on bank owned property often referred to as a real estate owned properties reos.

Youll also have to do your own legwork and research the background of the property to make sure youre not buying a former. First of all you have to pay cash. Buying property at an auction offers the possibility of finding a real deal but it also means youll need to have your financing in place before the gavel goes down at the end of the bidding.

The good news is if a foreclosed property is in decent condition and you have a good credit history the deal could work like a traditional home purchase. In the ultraluxury auction market less than 10 of winning bidders get financing for their purchase says laura brady president of new york based concierge auctions where the average sale price is 5 million. All financing should start by researching lenders to find the best terms ie.

When financing a foreclosure there is a process to follow that replicates how to apply for a mortgage. In a nutshell no contingencies means that you have to secure funds or financing prior to the auction. Many ways to mess up.

Do your research and conduct as many inspections as possible since reos tend to. The type of loan that the bank had on the property might change how you locate bid on and buy the property. The purpose of a foreclosure auction is to get the highest possible price for the property in order to mitigate the losses a lender suffers when a borrower defaults on a loan.

Real estate bargain hunters formerly had to follow auctions put on at courthouses or sift through reams of legal filings. Buying foreclosures at auction is full of traps for the unwary hamilton says. How to finance a foreclosed property being prepared is the key to financing a foreclosed property.

If the highest bid at the auction is insufficient the lender then gets title to the property and holds it as a bank owned or reo property. And youre paying for all of the loans back interest taxes and attorneys fees on the property. But the wave of foreclosures brought on by the subprime meltdown has not.

Get your financing in order most foreclosure auctions accept cash bank money order or cashiers checks for payment. Before the mortgage crisis of 2008 2009 buying a foreclosed home was a much more difficult proposition. Most real estate auction contracts have no financing contingencies.

How To Buy Foreclosure Properties At Auction