Once you have signed the contract to purchase property, you will need to contact one of our approved lenders. (Tip- Most lenders, mortgage brokers, and banks cannot finance foreclosed homes because they are not in pristine condition.) We have established strong relationships with a number of lenders who are comfortable with homes that need work. These lenders are not any more or any less expensive than your traditional mortgage broker. There are three financing options for foreclosed homes.
- Pay cash for property.
- Get a mortgage. They require a down payment of 20%. This loan is probably very similar to the loan you have on your personal residence. Payments are interest, taxes, insurance. Most loans are amortized over 30 years. (This is a good way to start investing)
- Get a commercial loan. This type of lending is much different from a “traditional” mortgage. Commercial lenders require 20%-25% down payment. Although, they have a higher down payment requirement, commercial bankers will be much more creative in collecting down payment. For example, investors can cross collateralize or cash pledge their down payment. (This way of borrowing is for the more seasoned investor. If you are not sure which way to start, I am here to help.)