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Buying a foreclosed home. What fees do I pay? (This'll be my first home!!)?

• I'm a college student (still at home with mom; haven't paid many "real" bills other than credit card statements), and I'd like to buy a home. I really want to buy/repair a foreclosed home, but I have a LOT of questions. And unfortunately, I can't really ask for help in my personal life. So...if someone here could help, I'd greatly appreciate it! =) MY QUESTIONS (9 TOTAL) --------------------------- --------------------------- [1.] If a house (from a website like HUD, HomePath, etc) is listed at $6500, is that ALL that I have to pay? Or are there "additional fees" such as state taxes? Will I also owe an agent (or whoever is selling the house) some money as well? =============================== =============================== [2.] If I pay for the house in cash, I won't need a mortgage, right? [2a.] Can I get a mortgage for part of the payment? Let's say I have $2000. Can I just get a mortgage for the remaining $4500? [2b.] If I DO get a mortgage...is there a risk that the mortgage will change based on the market? (Ex: Let's say it takes 16 months for me to repay that $4500...but now the housing market has improved, and the house is estimated to be worth $8000 now. Can they force me to pay back on that new rate of $8000?) [2c.] If the house was originally worth $45,000 (but again, I got it for $6500)...will I have to pay the remaining $38,500 at some point? =============================== =============================== [3.] Will I still need to hire an inspector? Even if HUD's website listed their own PCR (property condition report), which already outlined what needs to be fixed? =============================== =============================== [4.] Are property taxes (or the "taxable value"?) based on the current cost of the house ($6,500) or the PREVIOUS cost of the house ($45,000)? Or is it based on something different altogether? =============================== =============================== [5.] What else will I need to pay, besides: *The price of the house ($6500+), and a mortgage *Back taxes (if they exist) *Property taxes *Repair work *Inspection fees *Closing fees (Do these exist? What IS a closing fee?) =============================== =============================== [6.] What else do I need to research/ask the seller? My cousin said to "make sure the title is free and cleared", but I'm not sure what that means. =\

• Answer:

  I would recommend that you speak with a real estate agent - or - a bank lender. You will not get a mortgage for $4,500. It's hard to find a lender who will loan under 50k (they do exist though). In my city, the lowest mortgage you can get is 15k. $4,500 would be a personal loan... if you qualify. If you pay for the home in cash, then you do not need a mortgage. Closing costs vary by city/state. If you don't actually use a realtor or have a mortgage, they're going to be low. You do want to make sure that the title is clear (i.e. there isn't a 40k lien on the house that you'll have to pay, etc.). You will want to make sure that you have an inspection -- it's $300-$400 typically. Even if you know you're buying a fixer-upper, you need to know if the place can be liveable... or if you'll have to completely demolish it and build a new home -- there's a lot that could be wrong with homes and the inspector can help you find out issues and relative costs of repair. Property taxes are based on the homes' assessed value (different from the appraised value). Look into speaking with a knowledgable real estate agent or attorney... if you have to spend a few hundred dollars to get all of your answers and accurate information, it's well worth it because it could save you thousands of dollars. Good luck to you.