Buying foreclosure down payment

If you're thinking about buying a distressed property, you may wonder if buying a foreclosure without a down payment is possible. Whether or not you need a down payment to buy a home that has been foreclosed depends on several factors. So, how do you determine whether or not you need to put money down when you buy home foreclosures?

If you want to buy a foreclosed property at a trustee auction, you may need a lot of cash. Most of these auctions require you to pay the full amount or a percentage down if you make the winning bid. Typically, you need a cashier's check for either payment. In some states, like Arizona, you only need a small amount of earnest money at the auction. Ideally, you should check with the auction companies about the particulars of the auction before you attend.

Look at foreclosed property listings here.

If attending an auction seems daunting to you, you may want to look into the possibility of buying a home from the United States Department of Housing and Urban Development (HUD). Thanks to HUD, buying a foreclosure without a down payment is possible. HUD acquires homes when someone with a Federal Housing Administration (FHA) loan defaults on the mortgage. These homes range from single-family homes to owner-occupied four-plexes, and they can typically be purchased at prices that are less than fair market value.

In order to buy a HUD home, you simply need cash or financing. Although both investors and people who plan to use the home as their permanent residence are allowed to buy HUD homes, you will get priority over investors if you are buying the home as a residence. Depending on the lender who finances your loan, you may not even have to make a down payment. Ask your lender if it offers FHA loan programs that reduce your down payment or pay it for you.

Before you look at foreclosure listings, take the time to apply for financing. Your loan advisor will be able to tell you whether or not you need a down payment. In some cases, he may have have some tips and tricks that can help you avoid having to come up with a down payment. It is important to note that some communities offer down payment assistance to eligible buyers. Thus, you may want to investigate this possibility as well if you're interested in buying a foreclosure with no down payment.

Once you have your financing and down payment assistance, if available, go to Reply! to look at foreclosure listings in your area.

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