Very often when purchasing a foreclosure (bank owned home) the home is in such disrepair that it will be impossible to obtain a "normal" mortgage from a bank. For instance, if there are no kitchen appliances, the heating system is not functioning, walls have been removed, etc. the bank will not issue a mortgage. Under these circumstances a purchaser would have to make the purchase with either all cash or a 203k loan - this loan approves the repairs that are necessary and provides enough money to make the necessary repairs that the bank will approve.
This is a basic idea - a loan officer or mortgage broker will be able to better explain the process to you.
Should you have any additional questions/comments or want to speak with a knowledgeable mortgage agent, please contact me.
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Regards and Good Luck,
Arlynn B. Palmer, ESQ, SRES, CBR, CMS, CNS
Coldwell Banker Claire Sobel
Associate Broker, REALTOR