How to Get a Mortgage for a Repossessed Home

A repossessed home can be a good opportunity for a potential homebuyer to ascend the first step of the property ladder. These homes are available at lower prices than usual. Lenders do not generally make available information on mortgage products for repossessed property. However, an enquiry about packages may reveal attractive deals for the transaction. You may weigh up the issues detailed below for taking out a mortgage for a repossessed house.

Attend Property Auctions

Lenders put up repossessed homes at property auctions. You may ask your local mortgage adviser and real estate agents about auctions in the area you want to buy. Alternatively, you may sign up with auctioneers for sending you email alerts about property auctions.

It is advisable to visit an auction without intending to bid to get an idea about how the process works. You must carry out the appropriate research before placing your bid for the home you propose to buy. Ask your lawyer to check out the title deeds to the home. Take on the services of a property inspection company to ascertain the state of the home before bidding. A repossessed home may not be in a very good condition with the previous owner being short of funds to pay the mortgage dues.

Acquiring a Mortgage

You must have a financial arrangement in place, immediately after bidding for the home. Once the property vendor accepts your offer, you cannot pull yourself out from the process. Generally, a vendor allows a month to the buyer to arrange for the mortgage for purchasing the house. In addition, you will have to pay deposit of up to 10% of the total value of the property at the auction.

A mortgage adviser would be the best person to help you in procuring a suitable deal. Professionals in the business could explain the procedures in obtaining a mortgage and help with the paperwork involved in buying a repossessed home.

The mortgage lender will assess you on your financial standing. You need to present the usual documents like pay stubs for the last couple of months, income tax returns for the last financial year and other essential information with the application form for the loan. The lender will check your credit history. An unblemished credit report will contribute significantly toward getting a loan product with reasonable monthly repayments.

Deciding on an Escrow Account after a Refinance

The monthly mortgage dues of a borrower consist of homeowner’s insurance, private mortgage insurance and property taxes apart from the mortgage principal and interest payments. Lenders require that you pay the insurance amounts and the property taxes in an escrow account held by a third party called escrow services....

visit the full blog »
HUD Guidelines for Manufactured Homes

A set of directives prepared by the Department of Housing and Urban Development (HUD) may have served to enhance the quality of manufactured homes. Homebuyers are quite willing to apply for mortgages for this highly affordable quality of housing. Here are the key guiding principles put forward by the...

visit the full blog »