The type of sale and property determines your Virginia foreclosed homes financing options
The foreclosure market is ripe with great deals if you want to be a homeowner or real estate investor. When it comes to buying Virginia foreclosed homes, financing options depend on the state of foreclosure the home is in and where you are buying it.
Before you go after financing for a foreclosed Virginia home, it is important to know the stages of foreclosure and types of foreclosed homes. The following is a general overview of both.
A pre-foreclosure sale is occurs when the current homeowner goes into default on the home loan and sells the property. The sale may be like a traditional sale or it may be a short sale, in which the lender agrees to let the homeowner sell for less than is owed on the mortgage. Your financing options are similar to your options in a traditional home sale. You may also be able to take over the homeowner's mortgage if you make the delinquent payments.
Once a home is foreclosed, it will typically be auctioned. Financing the purchase of Virginia foreclosed homes at auction differs from a pre-foreclosure sale. You typically need to get pre-approved for a mortgage prior to the auction and pay 10 percent of the price the day of the auction. The down payment can range from 5 to 20 percent, so get the auction rules before bidding. After the auction, you may have up to a month to cover the entire purchase. Again, auction rules are advertised before the sale so you want to do your research before bidding.
Real estate owned (REO) property or bank-owned homes: Many foreclosures on today's market are real estate owned (REO) properties. If a home does not bring the lender's reserve price at auction or the lender chooses to skip the auction process, then the lender sells the home. The financing to purchase these Virginia-foreclosed homes is less restrictive. Often, the lender selling the home will have home loan programs to finance it. You can apply for a home loan with the lender of your choice. You may even qualify for a home loan program through the Federal Housing Administration.
Financing the purchase of foreclosed homes in Virginia is available through many sources. Research your options before you make an offer or bid on a foreclosed home. If you are ready to look at foreclosed homes in your area today, go to RealtyNow for free real estate listings.