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How much cash do I need to purchase a foreclosure?

At first, you generally don't need much of an earnest money deposit when negotiating with property owners. Deposits can be $1,000 or less. Later, of course, you will need to obtain the funding to pay off the current debt on the property. The amount of cash that is necessary depends on a number of things. Generally speaking, though, you will need to supply: * Earnest Money: The deposit that is supplied when you make an offer on the house. * Down Payment: A percentage of the cost of the home that is due at settlement. * Closing Costs: Costs associated with processing paperwork to purchase or refinance a house.

These days, not much. Ideally, you would have enough cash for a 10% down payment, closing costs, and enough left over to cover two or three months of monthly housing expenses. That gives you a chunk of equity in your house upfront and makes the lender happy -- something that usually translates into a better deal. The trouble is, coming up with that much cash can be all but impossible for many first-time buyers. After all, we're talking $15,000 on a $150,000 loan or $25,000 on a $250,000 mortgage. The good news is that lenders over the last couple of years have become increasingly willing to finance as much as 95% or even 97% of a home. While this sounds enticing, remember that small down payments have their price. You start with very little equity in your home as well as you will have a higher mortgage payment.

This series of articles is brought to you by A. Mark Argentino and other real estate related resources, including Canadian Real Estate Association CREA and the Ontario Real Estate Association OREA. Back to list of Real Estate Helpful Articles

Whether you are interested in a Power of Sale Property, a Foreclosure Sale or a regular property purchase, I can assist you with all of the complexities when you purchase or sell your next property.  Please don't hesitate to email me If you have any questions or require further information, please send me an email. Thank you, Mark Argentino Read about Power of Sale, Bank Sales and Foreclosure Properties FAQ's Read a very detailed section about Power of Sale and Foreclosure or go back to list of Real Estate Helpful Articles