How Do I Get Prequalified to Purchase a Foreclosure?
A loan pre-qualification is not a commitment from a lender to provide a home mortgage to you. As soon as you have applied to your loan only the underwriter can make that commitment. A pre-qualification is not the same as a pre-approval either, and won’t carry as much weight with the lender that’s selling the foreclosure. A pre-qualification from a lender will provide a ballpark figure of what you can afford to cover a foreclosure. With that in mind, you can go shopping.
Make a list of all your outstanding debts. Contain the monthly obligations. Also make a record of all your income sources and resources .
Find a lender, not a mortgage broker, that you want to conduct business with. A mortgage broker can’t provide you a loan pre-qualification. If you’re working with a real estate agent, she can refer you to a lender, or you can shop around and find one that is offering attractive prices. Be mindful unless you lock in a rate; that loan rates fluctuate daily, it’s subject to change.
Meet with the lender and notify her that you’re interested in bidding on a foreclosure. She’ll review your income and debt lists and provide you for. A credit report may run, but that’s generally reserved for loan application or the pre-approval.
Have a look at foreclosures in the purchase price range provided by the loan pre-qualification. When you find one that you would like to purchase, make a deal, subject to loan approval and subject to the house assessing for no longer than what you are providing.
Submit an application for a loan.