Whether you use cash, a home equity line of credit, resources from other investors or mortgage products, secure the money for your purchase in advance. Sellers only want to work with serious buyers who are ready to buy quickly. You could miss an opportunity if you don't have your financing in place.
Determine how much you can afford. How much you can afford depends on the amount of cash you have on hand and the amount a lender is willing to loan you based on your credit rating, income and other factors.
There are two rules of thumb:
You can afford a home that is up to 2.5 times your annual gross income
Your monthly principal and interest payments should equal one-fourth of your gross pay, or one-third of your take-home pay
Not all lenders finance foreclosure properties, so you may have to shop around for a lender who does.
Work with a lender who understands the foreclosure process, and can guide you through certain steps, such as ensuring that a property is FHA-compliant.