Foreclosures and Qualifying for a Mortgage
Before you buy a bank foreclosure, you’ll need to qualify for a mortgage. Mortgage companies use ratios to analyze your mortgage payment. Mortgage companies will calculate your ratio of monthly income to your proposed monthly payment. Lenders will typically deem you a foreclosed house worth about three times your total gross annual income.
If you want to buy foreclosures, online mortgage affordability calculators will give you an idea of how much of a mortgage you'll be able to procure. To establish the price range you can afford, you’ll have to enter information such as your monthly debt, cash down payment, and your annual income. If you work with a lender before you decide on a foreclosure home for sale, you can figure out if qualify for a mortgage large enough to finance the foreclosed home you want.
Mortgage companies will also want to consider your credit score and the stability of your employment history. Other factors they will consider are the value of significant pieces of personal property such as your car, and your current bank and car loan account balances. Lenders will use these numbers to determine whether you can purchase a foreclosed home.