Everyone talks about how wonderful it is to invest in foreclosed properties and the myriad opportunities on the market. But the truth is, it takes a little more than optimism to be successful in foreclosure investing. If you plan to buy Wells Fargo foreclosures, you should know that there are things to keep in mind in order to make the most of your financial potential.
To say the least, it is not enough that you express your interest in a property. Banks now have strict lending standards, especially with foreclosure problems popping up across the country. They would like to offer and sell these properties to people who can really demonstrate the ability to pay their mortgage.
Get pre-approved
If you want the bank to notify you when buying Wells Fargo foreclosures, you must get a pre-approved loan. A pre-approval means that the bank agreed to loan you up to a certain amount to cover your purchase.
In addition to helping you set your budget, a pre-approval also qualifies you as a priority buyer, which means that the bank considers you a serious buyer. Banks will tend to favor you if you have a pre-approval letter, as it shows that you have met the loan requirements and planned financing, which is a good indication that you are financially responsible.
Know your options
You will find certain properties in your search that do not meet your standards or purchasing requirements. Some foreclosures are in a less desirable state than others. This is mainly due to the fact that they were previously owned by troubled borrowers who were no longer able to keep up with their payments, let alone the costs of maintaining the house.
But there are buyers who actually prefer to buy foreclosed properties that need repair as they are cheaper, which is great for a home remodeling business. But if you are going to use the property as your residence and you are concerned about how much it would cost to repair it, there are financial solutions for you.
Wells Fargo foreclosure buyers can avail of a purchase and renewal loan that combines purchase and upgrade costs into a single loan package, eliminating the need for you to go through separate loan processes. Another beauty of this loan is that you can now proceed with the renewal once you have closed the deal. And because the loan amount is calculated after all the improvements, there is a chance that you may qualify for larger funds than if you were dealing with other types of loans.