How to Buy Foreclosed Homes With No Money Down & No Credit

Foreclosure properties can benefit the consumer as an investment with major paybacks. Sold far below market value, a few renovations can dramatically increase the sales value of a foreclosed home after purchase. It is a misconception that one need perfect credit and cash available for a large down payment in order to capitalize on this type of investment. Don't sell yourself short. It is possible to purchase a foreclosed home with no credit and no money down.

Things You'll Need

  • 3 to 4 months of mortgage payments saved

Step 1

Go to the County Clerk's office and look through the list of properties scheduled for foreclosure. All new foreclosure sales notices are posted the first Tuesday of every month right after the previous listed properties are sold in auction.

Step 2

Visit the owners in line to lose their property through foreclosure and propose taking over their payments using an assumption. Many distressed property owners facing potential foreclosure view this as a sensible option because it allows them to wipe clean their past due payments from their record, as well as avoid having a foreclosure mark placed on their credit report.

Step 3

Contact the lender. Request a loan assumption from the lender. You want to specifically ask for a loan assumption without having to qualify. This means you can takeover the mortgage payments from the bank simply by showing you have 3 to 4 months worth of the payments available in your bank account.

Step 4

Have a contract agreement written up to purchase the home through a loan assumption addendum. There are specific state approved forms for this. The current owner of the property should sign your contract and then you need to have it sent to the lender. When the lender approves the assumption escrow can be opened on the home.

Step 5

Apply for a title with a title insurance company. You may have to pay some minor fees, but once the title is issued you can close on the property. This process should take about 1 week. Complete your purchase of the property in front of a notary, preferably with the previous owner present, and like that, you will have purchased a foreclosed home without a credit check or down payment.

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