Getting a Mortgage on a Foreclosure/Bank Owned Home – CAN IT BE DONE???

Getting a Mortgage on a Lehigh Valley Foreclosure/Bank Owned Home – Can it be done??

Yes!  All Day long…The question is what type of mortgage can you get?  That is the question.

When dealing with any type of large purchase you should make sure that you are working with experienced professionals all the way around.

Real Estate Sales – Is a sales business but you should weed through those fast talking sales type personalities…and look for a Real Estate agent that works more like a Real Estate Consultant instead.

This is one of the largest purchases a person makes in their life – I do not care how much you spend but next to buying a car and getting married this is the 3rd most expensive investments and just as stressful as the rest.  Interview and ask questions – make sure you know who you are working with before you make a written commitment to work with them.

Okay – So, what kind of loans can you get on a Bank Owned/Foreclosure? Well, It Depends!

Let’s talk about Residential Owner Occupied properties in this Blog.

It depends on what type of loan you are looking for: The best way to think about this is, How much do you have saved to buy a home? Are you looking to purchase a home with the least amount of money out of pocket? Do you want to avoid paying mortgage insurance?

1) I always ask my buyer’s are you looking for the least out of pocket type of loan? If so, then there are a few options.  There is the typical FHA loan and this is a loan for owner occupied properties – with this loan you only need 3.5% down and if the property you want to purchase has a bad roof or mold in the basement or even the cooper piping has been ripped out – you can get an FHA 203K Rehab loan and you will be set.

2) If you are looking for purchase a home anywhere above North of Coplay, west of Macungie, North East including Bath and above than the property may be eligable for USDA Rural Housing loan which is 100% financing. This means you do not have to put anything down to get the loan like with FHA you must put 3.5% down to get the loan.

3) If you have saved money for your purchase and/or you are selling a home and plan on putting a significant amount of money down on your purchase then you best bet is a conventional loan – There are less restrictions on this type of loan but depending on the condition of the property you still may need a renovation loan.

4) Are you a First Time Home Buyer? Do you find it difficult to save money and will you have less then $5000 in savings/checking but you can pay your monthly obligations on time and you currently live in Lehigh County and want to purchase a home in Lehigh County -Depending on your Family household monthly income, you could qualify for a special program through the Neighborhood Housing Services of the Lehigh Valley – They work with 2 local mortgage companies that will help you with a 2nd loan that will give you 5% down and 6% closing costs necessary to purchase a home.  If you keep the home for 5 years – this loan will be forgiven!! There are also programs for Northampton counties but no loans are forgiven there.

Sometimes – repairs needed are unknow until you have a professional home inspector out to the property you plan on purchasing – When you make an offer on a property you typically have a minimum of 7 to 10 days to conduct due diligence or inspections to make sure there isn’t anything about the property that you do not accept – an unknown material defect like Mold, Roof, defective Heating, plumbing systems etc.  Basically, anything that is going to cost over $2000.00 total to replace/repair.

Looking for More Details: Click here Lehigh Valley Down payment and Closing cost assistance programs.

Hope this Blog was helpfu.

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Lehigh Valley Foreclosures & Buying Foreclosed/Bank Owned Homes – Financing Options BETTER than FHA – No Mortgage Insurance, No Appraisal, 3% down

Lehigh Valley Foreclosures & Buying Foreclosed/Bank Owned Homes – Financing Options BETTER than FHA – No Mortgage Insurance, No Appraisal, 3% down!

The HomePath Mortgage Program for Fannie Mae Bank Owned Homes – The Basic Details (other qualifications may apply) Today 10-7-2010 (only Lehigh & Northampton Counties) there are 259 Foreclosured Homes Listed and are either Available, Pending or under agreement right now. OF THOSE – Fannie Mae Owned = 77 ranging from 24,900 to 730,000.00

FACT: Foreclosures are one of the best ways right now to purchase a home and gain instant equity.

FACT: Banks need to sell their inventory because there is more to come for the next 2 to 3 years.

Program Requirements & Benefits – THE QUICK FACTS of the Standard Program NOT THE REHAB program

1) This program is ONLY available to purchase Fannie Mae REO (Real Estate Owned) Foreclosured Properties. But, there are plenty of them.
2) You can see all of these properties available Here: www.homepath.com – I can show you any of these properties located in the Lehigh Valley Area. (Lehigh & Northampton Counties)

3) There is NO appraisal which saves you 450 to 575.00 out of pocket cash within the first 7 days of your offer getting accepted.
4) If you have a credit score of 660 or higher you only need to put 3% down!
6) If you have a credit score of 620 to 659 you will need to put down 20%.
7) Primary Residence – Owner Occupied Homes (no investors basically) you can get up to 6% seller’s assist!
8) Investors can get 2% Seller’s Assist
9) The Buyer will be responsible for 2% PA Transfer Tax – Typically it is 1% to Buyer and 1% to 1% to seller – for this loan you “the buyer” pays both sides. This is 2% of the purchase price – 100,000.00 property 2000.00 transfer tax to be paid.
10) If the Buyer is only putting down 3% then they will also need to show they  have 2 Months of Loan Payments including property taxes and homeowner insurance payments in their bank account at settlement – This money can be a gift from a family member. This is known as 2 months reserve…just incase something happens like a job loss and injury..the bank sees that you can still cover 2 months in payments.

Owner Occupied VS Investor Rules for Making offers on a Fannie Mae Foreclosure/REO

(so, the key is to know soon as the property hits the market and don’t wait to make your offer) Again…Take a look at my Lehigh Valley MLS Search. Nothing is hidden from you and we work as a TEAM.

1st Look Program – Basically, if you go to www.homepath.com and the property is marked with the “First Look” label…this means that the home has just hit the market and the following rules apply.

The banks would prefer to sell foreclosed properties to Occupied homeowners…WHY? Good question.

Because people who owner there homes take better care of their homes! PERIOD. If the home goes back to a foreclosure in the future…there is a better chance that the home will be in better condition because tenants and investors on average don’t take care of the property like a First Time Home Buyer.

1) The home MUST be on the Market for 4 days BEFORE the bank will even look at offers.  You can make an offer and post date it but, it will be held and submitted on the 5th day.
2) ONLY owner occupied Buyers will be allowed to submit offers during the first 15 days on the Market.
3) Investors will be allowed to submit offers on the 16th Day.

Finally, How can you get this loan? Local in the Lehigh Valley Area.  The only player right now is Wells Fargo.  I know my blogs always talk about Wells Fargo – But, they are the ones who are stepping up to the plate to help people in all areas of these special Government incentives.  Both National and local.

PS: There are programs available through HomePath for investors also.  But, this Blog is focused on Residential Owner Occupied Homeowners.

PSS: Here is another reason that your first step should be meeting with a Real Estate Agent that is Foreclosure and Short Sale Certified.  They are the ones who can make sure you get the best deal with the best financing options.  Depending on who you talk to will depend on your end results.

Let me walk you through it, One Step at a Time.