If you’re considering buying an REO (real estate owned) or foreclosed property, you may be under the impression that you have to pay for it all in cash.
While there are many benefits to an all-cash purchase, it’s certainly not realistic for many buyers. While any amount of cash you can put down for a payment on a foreclosure is helpful, buying all in cash isn’t always necessary.
Myth:
You must purchase a foreclosure property with cash.
Fact:
Financing an REO/foreclosure is just like financing a non-distressed property. As your starting the loan qualification stage, make sure to disclose that you’re looking to purchase a distressed property.
Unless the listing states that there is some reason why a property cannot be financed, then you should be able to finance it just as you would any other property. If the home needs extensive rehab work, that could be an issue. But there are loan products that take this into account and will lend you a bit more money to help you get the work done.
But generally speaking, most foreclosed homes can be financed in the same way that a non-foreclosed home would be financed.
If you’re in the market for a home a distressed property is a great option to consider. Metrowest is your ultimate resource for distressed properties in Denver – we specialize in these types of transactions and can help every step of the way. Give us a shout – we’d love to help you start the process.