Looking to buy a foreclosed/auctioned home as primary residence. How do I get a loan first so I have the cash? Aren't home loans based on property?

I am very unclear on how the process works. Do I get a loan now and just put the money in my account until I find the right home? When I've bought a home before, the bank typically needed to do a home inspection so just a little confused how that works. Also, saying I do get a loan and have the cash. I've read that you should show up with a Cashier's Check - but how would I know how much to make the Cashier's check for if I don't know how much my winning bid will be? I think I'm missing something here... lol
(0) | asked by: Kathleen Cherrix | share | 1 hour ago | Report
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ERA Martin Associates Martin
answer by ERA Martin Associates Martin    |   Visit My Website  
Hi there! Great question. You're right, it does seem confusing to secure the money before you have the property selected, when you need to qualify the property for the loan, too. You will want to meet with a mortgage lender first - I would recommend as the very first step. They will qualify you for a loan based on your income, debts, assets, and credit score. They will give you a price range in which you can afford, AND information on what type of home you can buy. Many loans these days require the home to be in move-in or good condition, which doesn't match up with a lot of foreclosures and their condition. So you'll need the info from the lender in order to identify which homes will fit. Then you can go house shopping! Your Realtor can help you figure out which homes will be right for the loan you're qualified for, and then you can make an offer accordingly. Once you have selected a home and have it under contract, you lender will review the home itself and make sure it's deemed worth of the money you want to borrow to purchase it. The lender will have an appraisal done, which will confirm the value and tell you if there are any necessary repairs or major issues. If all is well, you'll be able to proceed with your purchase. So the mortgage process has two steps - qualifying you as a buyer, and qualifying the house you want to purchase. You'll want to get yourself qualified up front, so you'll know what type of home you can shop for, and in which price range. I hope this answered your question. Please let us know if you're interested in some recommended mortgage lenders in the Delmarva area! Joni Williamson, ERA Martin Associates
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