Ok im a little confused on the whole process. Im going to try an use an example here… ok say you find a forclosure that the bank is trying to sell for $50,000. from what i understand that $50,000 is the amount due on the exsisting loan, am i right? ok say you decide to purchase this property, are you getting a loan from the same bank that is listing it? or how does that work? because if you are, i might and probably am wrong here, isnt that bank just lending out the money that they were trying to make back form this property, or, do forclosures have to be payed all cash? im confused, sorry if this sounds stupid.
When you find a property in foreclosure and the bank has not foreclosed yet you will be paying off the homeowners loan in order to get the bank to release their lien on the property.
Usually this is an all cash deal or you will get you own financing.
( ie , line up your buyer and have the buyers fund cover the loan amount and your profit is the difference of the loan and your buyers purchase price minus the closing cost and other fees.)
If the bank has foreclosed and its an REO ( Real Estate Owned), you will be paying cash to the bank but they will be less likely to negotiate after foreclosure.
Good Luck,
Tony
so if it is a REO then i will have to get a mortgage from that lender and just make payments on it?
from my personal experience, banks usually dont like to give loans for properties in their portfolio. you have 2 options
- pay in cash
- find a lender that will give you a letter of unconditional funding within 48 hours. what that means is because of your “great credit” income and assets they will most definatley give you a loan. note this is for a conventional mortgage, no hml’s. once you have that from the bank, the loan mit dept to the bank with the reo will give you extra consideration in regards to you purchasing the property, and you will be more likely to get a better price for the house