Buying HUD home - Pros and Cons?

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I am looking for someone who has purchased HUD home as a first time buyer. I am going to an open house on Sunday and its listed as a HUD home. Great locality and price is also on par with market. What are the pros and cons of buying one?

Thanks

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Pros:
Easy to qualify, well defined process, don't need 20% down.
HUDs can be assumed, which can result in a steal if interest rates go down.. Not that HUD buyers ever have the cash to assume them.

Cons:
You're essentially stuck paying PMI even if you get below 80% equity
Slightly higher interest rate
Price limits

dcg9381 said:   Pros:
Easy to qualify, well defined process, don't need 20% down.
HUDs can be assumed, which can result in a steal if interest rates go down.. Not that HUD buyers ever have the cash to assume them.

Cons:
You're essentially stuck paying PMI even if you get below 80% equity
Slightly higher interest rate
Price limits


Thanks. Can you explain what you mean by HUDs can be assumed ? The main pro I know for a HUD sale is you have to be living in there for at least 1 year and so that will keep the flippers away.

assuming a mortgage means a buyer "takes over" the mortgage of another, "assuming" the remaining mortgage amount and the responsibility to make payments.

A few decades back a lot of mortgages were assumable, and assuming a mortgage involved less hassle than applying for a new one. However, those days are basically gone. Today it is relatively easy to refinance or for a buyer to get a new mortgage. Most loans cannot be assumed today, apparently HUD loans can. Barring some rather unusual situations, I can't see an assumable mortgage as being a benefit today.

Cons:
difficult to get answers from HUD or it's representative. My bank and I were ready to close by HUD's closing company would've commit to a date. If you aren't in a rush to close like we were then you should be fine.

They have funny rules about not accepting faxes and everything had to be signed in blue. If once thing in the entire package wasn't to their liking then they will kick back the entire package and make you resign and overnight to their processing center.

I wanted to have my wife and I on the deed but my name on the loan only so the pre-approval was on my name but HUD made me get the pre-approval in both of our names to match the offer. This made no sense to be but I didn't argue since I was in a rush to close.

Pros:
House that we bought seemed under priced but that may not always be the case.



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