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Old 03-21-2009, 01:43 PM
 
26 posts, read 83,425 times
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I'm interested in purchasing a house that is coming up for a foreclosure auction. Will I be able to get a normal mortgage for this purchase?

I believe the auction will require me to settle within 15 days. Assuming I pay an application fee and go through U/W in advance, will this be a problem?

Lastly, how will they calc the down payment requirement - off of the appraised value or what I actually pay for it at auction.

Thanks
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Old 03-21-2009, 04:10 PM
 
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Fr purposes of "minimum equity to avoid PMI"The down payment is ALWAYS a calculated for the La percentage of what you paid -- no 'credit' for getting bargin.

Most decent mortgage brokers that are in business RIGHT NOW have experience in financing-post-auction, but you are correct about you have to be DONE with an approved application BEFORE you are bidding. You can't really get underwriting BEFORE the auction, but you need to have "real deal" pro who is not going leave you twisting in the wind while finance evaporates.

What area are you in? Makes a HUGE difference in the likelihood of getting a place financed. The "anti redlining rules" don't apply when the properties fail appraisal even at give away prices in devastated metro areas (cough,Detroit, cough).


Good Luck!
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Old 03-22-2009, 04:50 AM
 
Location: Outside Portsmouth, NH
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Most mortgages won't finance an "as is" house that is in disrepair.
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Old 03-23-2009, 07:21 PM
 
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I think you are making a big mistake if you think more than a handful of auction homes are in "disrepair". A great deal are simply "as is" becuase the lender has no desire nor abilit to engage in dickering /requests to clean / repair the minor stuff that EVERY home seller can be pestered with.

Having a listing be "as-is" is meaningless. If the place appraises out there will be lenders to write the mortges.

The key to getting a mortgage closed FAST ENOUGH to take part in an auction is to have RELATIONSHIP with a lender that is not too big / far away to get all the work on your purchase in a timely manner.
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Old 03-23-2009, 08:06 PM
 
Location: I think my user name clarifies that.
8,292 posts, read 24,089,431 times
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Quote:
Originally Posted by love to shop View Post
I'm interested in purchasing a house that is coming up for a foreclosure auction. Will I be able to get a normal mortgage for this purchase?

I believe the auction will require me to settle within 15 days. Assuming I pay an application fee and go through U/W in advance, will this be a problem?

Lastly, how will they calc the down payment requirement - off of the appraised value or what I actually pay for it at auction.

Thanks
I've not been in this exact situation, but I've bought and sold quite a few homes.

First of all, this is probably not something that's going to work if you're a first-time home buyer. There are just too many loose ends and "what ifs" for a person who doesn't have experience in home ownership, and a previous relationship with the bank.

That said, I'd suggest you get to the bank and talk with a mortgage loan officer. Find out what they're willing to do for you. See if you can get pre-approved, and for how much. You can get all the tax information on this house from your local assessor. You can also find all the information about it, regarding prior sales, etc.


It's very possible that this purchase is doable. But you need to get started with your mortgage loan officer.
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Old 03-25-2009, 07:04 PM
 
26 posts, read 83,425 times
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Thanks for the replies. I've spoken to a number of lenders and have found that in order to get a conventional loan, an appraiser needs to be able to get into the house with utilities on. I've spoken to the trustee and they have told me you can not have access to the house until after you close.

I've read a number of articles that say fianancing is difficult for forclosure purchases, but some lenders specialize in it. However, they never say who those lenders are and no one I have spoke too is aware of any.

I guess that is why almost no houses get purchased at auction!
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