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Avoiding HUD Home Headaches: Tips On Buying HUD Foreclosures!
December 8, 2009 by Financemyhome · Leave a Comment
Bidding & Buying on Minnesota HUD homes—it seems to be the hot ticket in town.
However – Remember these key points to avoid problems and advise buyers:
• Only primary residence buyers allowed in the first round of bidding.
• Determine if the home is being offered as eligible for Minnesota FHA financing:
o Has an existing FHA appraisal that must be used (unless expired)
AND
o The sales price has usually been based on the existing appraised value. Bidding above the sales price may result in them paying the difference out-of-pocket between their bid and appraised value.
• HUD does not automatically provide title insurance. Make sure that the lender has disclosed this additional expense to avoid surprises at closing. Only if HUD has agreed to pay closing costs, could the insurance be provided at HUD’s expense.
• If HUD is offering a repair escrow, that this amount can be ADDED to the MN FHA loan, but HUD doesn’t pay for it.
• Lender documents must be to the title company up to 10 days prior to closing date in some states.
• HUD signs closing packages first. Then once the loan proceeds and the title company receives buyer down payment and closing costs, the buyer is allowed to sign. Make sure that the lender is aware and has the ability to fund the loan BEFORE they have a completed loan package.
• Closing delays are common due to “title clearing” issues. Foreclosed homes can have several liens due to utilities, taxes; etc that must be dealt with before closing can take place. Minneapolis HUD Homes are a great investment when the buyer is prepared from the beginning for all potential challenges, such as rescheduling of moving trucks, and possible rate lock extension fees.
When you work with experienced professionals like John Mazzara with RE/Max Associates Plus in Edina Minnesota and Patti Mazzara with Venture Development Inc, a MN Mortgage Broker, you will get the guidance and straight-forward answers that make the process easy to understand. Let our experience help you through your home purchase. Visit http://www.minneapolisstpaulhomes.com and http://www.ventureloanapp.com/
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