What To Know When Considering Purchasing A Foreclosure

By
Real Estate Agent with Coach House Realty 0225068313

 

 

Many homebuyers are attracted to the idea of purchasing a foreclosure because of what “seems” to be discounted pricing.  It’s true, that often foreclosures are discounted but there is a reason for this:  the home may need significant repairs or renovations to make it habitable.  If you’re a buyer who doesn’t mind “sweat equity” and can perform much of the repairs or renovations that’s great.  But, it’s important to decide on the type of mortgage you are considering.

If the foreclosure has “health and safety” issues you may not be able to get the type of mortgage available for a home that is not distressed.  Some of these issues are:

  • ·         non-functioning heat source
  • ·       no running water
  • ·         a leaking roof or other roof problem requiring repair
  • ·         broken windows or torn screens
  • ·         missing or defective hand railings at front or back steps
  • ·         missing or defective hand railings in interior stairways
  • ·         defective deck boards or missing pickets or pickets that are too wide
  • ·         missing toilets
  • ·         mold
  • ·         termites
  • ·         foundation issues

If any or all of these are present, then the Purchaser would have to pay cash or in many cases would have to get a mortgage that includes renovation or repair funds.  If you are considering purchasing a FannieMae Homepath Home, FannieMae’s HomePath Renovation Mortgage allows a buyer to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation — up to 35% of the as completed value, no more than $35,000.  More information Can be found at http://www.homepath.com/financing.html

If you are considering buying a HUD Foreclosed home that needs repairs or renovations, you can look at the information about FHA’s 203K Renovation loan located at this link:  http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k/203kabou

For any of your home buying questions, please feel free to call me on 804 482-1252 or email me at richmondhomes4you@gmail.com

 

 

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