Foreclosures & Financing
I am a HomePath Expert! I have specialized in financing for Fannie Mae Foreclosed homes for over two years now. I know this program well and it is 98% of what I do. If you are a realtor and would like for me to come into your office and educate, contact me to schedule a date. If you are a buyer, complete my loan application and I will work hard to get you into your new home!
HomePath MortgageMy professional opinion is that HomePath is the best loan for Fannie Mae Foreclosures. Typically you walk into the home with built in equity. There is no other loan that does not require an appraisal or PMI with less than 20% down besides HomePath.
This is a Conventional loan specific to Fannie Mae Foreclosures. Therefore, the better your credit score, the more you put down, the better your rate will be. Remember that you are more of a risk to the lender and quicker to walk away when you have a small amount invested into the home you are buying. The difference in interest rates vary about 1 point when you put 3% down vs. 20%. Why not keep your money in the bank and deduct your mortgage interest?
It is true that you will get a lower rate with an FHA loan. However, Private Mortgage Insurance on an FHA loan is 1% upfront and 1% monthly of your loan amount. It only protects the lender in the event that you are foreclosed on and has no benefit to you! If you go with an FHA loan, you will pay into the “pot” for 5 years even if you have 20% equity in your property! This is why I don’t agree with an FHA loan for a Fannie Mae Foreclosed home.
- 3% down payment – 660 credit score- 20% down – 620 credit score
- No Appraisal required
- Seller can pay up to 6% of your sales price and this can go towards closing costs, 1st year of insurance and Escrows!
- There is no Upfront or Monthly private mortgage insurance
HomePath Renovation Mortgage
Same parameters as above but a Renovation loan requires an appraisal to determine the future value of the property AFTER repairs are completed. I will roll up to $35,000 of repairs into your loan as long as you qualify for the payment and the appraisal/comparison sales in the area support this improvement. This is a much longer process and you cannot do the repairs yourself. You must use a Contractor that carries insurance and workers comp. They have to be willing to do your repairs with only 10% of soft costs (permits) upfront and get paid upon an inspection by the lender to verify they completed the job correctly. Your contractor has to be approved by us and a credit check will be ran. The process involves the following:
- You will have two underwriting packages. One for you personally and one for the contractor.- Make your best offer
- Once your offer is accepted, get your inspections to determine what needs to be done
- Get your bids either with a general contractor or several companies (your choice)
- Your contractor needs to fill out an application to be approved with us (I will provide this)
- We will order your appraisal based on future value. We must have the bids from your contractors before the appraisal can be done.
- Once you and your contractor are approved, we will move you into a closing date at a title company.
- You will close upfront, your rate is locked for the life of the loan and your repair money will sit in an escrow account with the lender to be dispersed upon completion of the contracted work.
- The contractor MUST complete all repairs within 3 months.
- Your first payment must be made even if repairs are not complete. It is normally due 6-7 weeks after you close.
