Six Risks of Buying Foreclosures Part 3. The interests rates that you have to pay for your loan.
Oh boy !
We all know that the interest rate on the loan can trigger some interest in a new loan for any old financing project.
It's been said that interest rates on investment properties are usually higher than the rates given to an owner operator in a commercial transaction or a homebuyer who intends to assume residency on the property of which they're trying to secure the loan.
If the business owner of the commercial property secures the loan the bank believes that less risk is involved because of the owner interaction with the parcel or parcels of real estate.
In the case of an investor purchasing small parcels of land or foreclosed homes with a credit card, these transactions average 7.9 to 11.0 percentile.
Working with the bank to establish a maximum bid would assist you and prepare you for your offer at auction.
The bank can't loan you the money after you've been awarded a successful bid unless the bank approves the loan for the amount of the bid.
If the bid amount exceeds your line of credit with your lending institution your bid will be disqualified.
Discuss the foreclosure with a banking official and research it carefully before you bid on it.
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