Home Buying in Madison>Question Details

Juan, Home Buyer in Huntsville, AL

How long does the financing a foreclosure takes vs regular sales?

Asked by Juan, Huntsville, AL Thu Sep 6, 2012

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Maria Cipollone’s answer
It may take a little longer buying a foreclosure vs a regular sale due to all the legalities that come along with the first one. Financing time it will be the same, closing process is longer than a regular sale.

Good Luck,

Maria Cipollone

1 vote Thank Flag Link Thu Sep 6, 2012
One thing that could affect things in Alabama is the 1 year right of redemption. IF the property was foreclosed less than a year ago you will only be able to finance up and to the amount that the bank bought the home at the foreclosure auction. If over a year has passed, you are in the clear. I assume if you are financing with the bank that holds the foreclosed note, and the property it could be a slightly smoother process.
Best of Luck!!
0 votes Thank Flag Link Sat Sep 8, 2012
With all due respect, you are VERY wrong. IF you purchase the property for MORE than the foreclosed bid price, then you must obtain an indemnity bond which is 1% of the sales price...that is what the lender requires. And no...financing with the bank holding the property usually does not result in an easier loan process. Banks lend on properties selling for higher than foreclosed bid price every day, just not without that indemnity bond. I have sold many foreclosures over the year.
Flag Sat Sep 8, 2012
Thank you for your prompt responses. I appreciated it.
0 votes Thank Flag Link Thu Sep 6, 2012
Scott, in our area FHA and VA can be closed in a 30 day time period. We are even processing our USDA loans in 30 days!
0 votes Thank Flag Link Thu Sep 6, 2012
It should not take any longer buying a foreclosure than it would an owner occupied hmes as far as obtaining a mortgage. They type of mortgage you get will affect the time it takes to close. Cpnventional loand should take 30 days, FHA and USDA should take 45-52 days. You do want to make sure a bank owned home is in the condition required for your type of loan.
0 votes Thank Flag Link Thu Sep 6, 2012
One other thing...there are LOTS of legalities that come along with the purchase of a foreclosure that a buyer needs to know. It is a different "animal" so to speak than a regular sale due to right of redemption issues and other legalities.
0 votes Thank Flag Link Thu Sep 6, 2012
Financing generally takes the same amount of time, however, the closing process can be extended beyond what a normal transaction takes due to dealing with a bank, title issues, etc. But in general, you should be able to close in about a 30 day time period.
0 votes Thank Flag Link Thu Sep 6, 2012
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