Thread: Buying Foreclosure

a pre-approval letter is a letter from a lender stating you have been approved for a mortgage

You can always make an offer - it doesnt mean it will be accepted but you never know

And they are tougher than ever now with the mortgage problem.
You'll get a pre-approval with a good salary, good fico score and good down payment.
The trick is the fico score, which seems to have changed these past months or so.
One client just lost 80 points 'because he did not include the new score logarythmes' whatever that means. One thing though: you won't get a 'good' score if "you just pay in time" anymore...
Also, you may offer less, and you should IMO...

Hi PRO11,
Welcome to the world of real estate investing.
Nobody can tell you if the foreclosure is a good deal for $85K
You really have to learn to do your numbers first.
I will encourage you to go to a bookstore and buy a small book about real estate investing. This will give you a good introduction and will answer a lot of your question. Don't waste your money on a big investment flop if you don't know what you are doing. This is my first advice to people buying Atlanta foreclosures as investment.

Originally Posted by jasmor81

a pre-approval letter is a letter from a lender stating you have been approved for a mortgage

You can always make an offer - it doesnt mean it will be accepted but you never know

Hey Jasmor, thanks for your reply. Now I know what a pre-approval letter is. On the offer I just thought since it was a foreclosure the 85k were the starting price and ppl would just bid on it.

Originally Posted by Codythebest

And they are tougher than ever now with the mortgage problem.
You'll get a pre-approval with a good salary, good fico score and good down payment.
The trick is the fico score, which seems to have changed these past months or so.
One client just lost 80 points 'because he did not include the new score logarythmes' whatever that means. One thing though: you won't get a 'good' score if "you just pay in time" anymore...
Also, you may offer less, and you should IMO...

What's a good salary if this house was to go for 85k? Also it has to do with ur income/debt ratio, correct? My fico credit score was 731 as of october this year, is that a fair score? I don't have the 10% downpayment if the set price was 85k. So its not enough to increase or credit score by just paying on time? So what should be done to increase it?

Deallocator thanks for the advice I really appreciate it. I know I have to learn to work with numbers before I make any kind of decision. I'm basing myself on this: House is going for 85k, of course I will make an offer for a lower amount (don't know if they will take it or not), houses around that area sell for minimun 95K-130K, the house its not old it was built on 2004, spoke to the realtor and she told that house only has cosmetic repairs that are needed other than that house its in great shape. Before I make any kind of offer I will have to take a look at it myself, but that's basically what I'm basing on. Can you please tell me what would you base yourself on? What book would you recomend me? Thanks in advance.

Any suggestions for good FORUMS for investors? Or regular sites?

I get the feeling that most foreclosures are going to be offered by the bank and that they don't do much negotiation. Is that true?

Originally Posted by PRO11

What's a good salary if this house was to go for 85k?

When you 85K payment +tax+ins are below 50% of your (salary-all expenses) balance.

Also it has to do with ur income/debt ratio, correct?

Correct

My fico credit score was 731 as of october this year, is that a fair score?

It was. Make sure it is still the same. A client of mine went from 720 (september) to 605 with the new World Saving FICO rules and 641 with the new countrywide FICO rules (december).

I don't have the 10% downpayment if the set price was 85k. So its not enough to increase or credit score by just paying on time?

If it's an investment and you are not buying it as second residence or better, primary residence, you'll have a hard time to get a loan today without 20% down. Unless there is something I don't know...(the banker or loan officer is your brother - you put a couple of Ferrari or Bentley as collateral - etc...)

So what should be done to increase it?

As per my phone calls to a couple of loan officers recently: 4 or 5 lines of credit (no less - no more)
Play with one with these rules (while you pay on time the others): Pay the minimum balance for the next 4 months. 5th and 6th months, pay balance X 1.5 (add 50%) and 7th reduce the balance to 20%-25% with a bigger payment. Stay there, in the 20%-25%.
Do it again with another one.
Make sure you are at a 30% MAXIMUM debt on all in all credit lines though.
If you have a credit line paid off, apply for another one and make sure to stay always with 4 or 5 credit lines. If you have less or more, it might have a negative impact on your credit, roughly few points though
There much more rules but i'm not in the field.