All prices are negotiable; however, you need to assess what it will cost to make the house liveable. While a house for $5,000 sounds like a great deal, it most likely is more than a house that needs some TLC. If you can afford $700 a month in rent, you should contact a REALTOR(R) that can help you find a home that is not only fit to live in, but requires only minor repairs.
ONE THING TO REMEMBER is that Uncle Sam wants you and every American to become a home owner. So, if you buy a home and are able to itemize, you will be able to write off the cost of property taxes for the year and all the interest you paid during the year. You should then figure out your income tax bracket and take that times the total of the 2 items mentioned. This will give you a glimpse of what you can expect back in a tax refund (that is if you don't owe any taxes ... that enough was deducted from your income).
AN EXAMPLE: Say you pay $11,000 in interest and $3,000 in property taxes. This means, if you itemize, you get to write off $14,000.00. If your tax bracket is 27%, you would be entitled to $ 3,780 tax savings ... or to break it down further, it works out to a $315 per mo. savings. If your payment is $980 .. it is really $665.00.
YOU LANDLORD not only gets these credits, but he depreciates the property as well. He is making a living off of you.
As a homeowner, you will be building up equity. Yes, we have gone through a tough market, but that is to your advantage. You are entitled to $8,000 credit (that is a $/for/$ credit...and homes are at their lowest for the most part, and interest is low.
When the market returns housing will start increasing in value and, to control inflation, the mortgage interest will rise ... and you will only be eligible for a lesser priced home ... providing you can still qualify. dbell4444@att.net.

Dear Mia,

Follow this link http://www.milwaukeehousinghelp.org or copy and past to url. It is the Milwaukee Housing site that has a new program that will not only assist you in buying a foreclosed property, but also there is up to $30,000 (non-payback) grants available if you qualify. They have counsellors that will guide you every step of the way and also a list of lenders that are involved in the program. I have clients working with them as we speak. It is an awesome program.

Linda

Foreclosures come in all different price ranges depending on location, condition, and the desire of the bank to liquidate the property. The lower the price the more work typically is required with limited finance resources. The type of financing you go after will determine how good your credit needs to be. If your credit is poor, it is unlikley a bank will want to lend you funds. The best way to find out the likelyhood of you qualifying for a loan is by contacting a bank and see what type of loan the bank approve. This will give you an understanding what price range of property you can consider.

The question about a land contract has been well explained by the previous people. A land contract is a loan by the seller to the buyer that does not go through a lender. There are many issues that you need to be concerned with:

. you do not own the property until the final payment to the seller is made
. If you make your payments to the seller but the seller does not make the payments to the bank, the property may be foreclosed on and you will be evicted
. Who pays the taxes and how do you make sure the taxes are paid

So when you purchase a property on land contract make sure you understand the risks and make sure you are comfortable with them in how it relates to the benifits received. If you purchase a property on land contract make sure you get an attorney to draft and review the land contract agreement.

Keith Manson
First Weber Group
Certified Distressed Property Expert
Greenfield,Wisconsin

Hi Mia,

It sounds like it is a foreclosed home for sale for $5,000. You really need a credit score of at least 620 in today's lending climate to get a mortgage. A land contract is where you give the seller a non-refundable down payment and pay the seller each month, until you pay off the agreed upon purchase price, or buy out the land contract by financing the balance through a mortgage. If you default (don't make your payments) the house reverts back to the seller (you lose your down payment) and the seller can sell the home to someone else. To see if you qualify for a mortgage, check with your bank or credit union. Good luck!

Hi Mia:

Congratulations on deciding you want to buy a home! I'll try to answer your all your questions, so you can know what to expect.

There are a lot of bank owned properties available right now, and many of them can be purchased at a great price! The problem with foreclosures is that they usually always are in need of repair. Everything from flooring, paint, bathroom fixtures, to plumbing, roofing, & electrical issues. Banks are hesitant to make loans on properties that need too many repairs to be made.

The good news is that WHEDA has started a new loan program called Neighborhood Advantage. This program assists buyers like you who want to purchase a foreclosed property, and can even assist you with down payment and closing costs with grant money.

With an FHA loan, you would have to have 3-3.5% of a down payment, and the property would have to pass an FHA inspection. Most foreclosed homes won't pass this inspection. With the WHEDA Neighbhood Advantage program, you would could have as little as $1000 of your own money as a downpayment, and the remainder would come from grants.

Although the WHEDA program doesn't use "credit scores" to determine credit worthiness, you would have to meet certain credit and income eligibility before they would issue you a loan. Your best bet would be to check out their website at: http://www.wheda.com. They can direct you from there.

To answer your last question, a land contract is a contract between a seller and a buyer where the seller provides the financing to the buyer at an agreed upon purchase price, and the buyer repays the loan in installments. The seller retains the title, while allowing the buyer to take possession of the property.

Once the full purchase price has been paid, along with any interest charged, the seller will convey title to the buyer. An initial down payment is usually required at the beginning of the loan, and a balloon payment is usually required at the end of the term. The down payment is an amount agreed upon between the buyer and the seller.

There is no official "list" of properties that are available for purchase by land contract, and you'll never find a forclosed or bank owned home that will accept this type of deal. Needless to say, they're a little hard to come by.

Good luck!

Debbie Bingham