subject: Fannie Mae Foreclosures Basics [print this page] If you are buying foreclosure for the first time and are considering Fannie Mae foreclosures, there are important things that you should know in order to make the right decisions. The right knowledge coupled with the right skills can easily translate to successful foreclosure investing.
Prepare Your Finances
Buying a house means having to secure financing unless you can easily pay in cash for the entire purchase value of the property. Understand that the lender would be interested in finding out your overall financial capability as well as the credibility of your credit before it will approve your application. In general, be prepared to provide them the necessary documents that will show your financial integrity, sources of income, sound credit score as well as your history of employment. All these information are useful information that the bank will utilize in assessing your mortgage application.
Also, be prepared to make a down payment. Your lender will definitely want to know how much you could put up for down payment. More often, this could signify to the lender your level of commitment in purchasing the property.
Buying Fannie Mae foreclosures will also require you to come up with a good credit history. This involves your purchases, your credit card payment history, your outstanding debts as well as your buying pattern through credit. It will also matter if you are paying your taxes diligently, home association dues and others.
In some cases, the lender will suggest that you put up an escrow account where you could put in money aside from your mortgage payments. This will assure them that you will have available funds to cover your payments once you start to show signs of default.
When buying Fannie Mae foreclosures, a preapproved loan will work wonders to your application since this could signify to the lender that you are genuinely interested in purchasing the property so much so that you have gone through the trouble of having your finances checked by a third party lender. It is actually a guarantee that your finances could handle the property purchase.
