| What is a foreclosure? To obtain a traditional mortgage, you give your bank or lender the right to take your home away from you and put it up for sale to pay the balance due on the mortgage if you don't make payments on your loan, don't pay your property taxes, let your homeowners insurance policy lapse, or do anything else that puts your home in financial danger. The legal action to repossess a home and sell it in this manner is called a foreclosure. I'm looking to buy a house, how will a foreclosure help me? This is a clear-cut case of 'someone else's loss is your gain'. The house that was repossessed by the bank and put up for sale is often available for well below the market value of similar homes in the area. Why? Because the bank or lender is eager to stop losing money on the property. Every day that they continue to hold the property is a day that they can't make money from it. Is a foreclosure the same thing as a HUD or VA home? Well, yes and no. HUD and VA homes are types of foreclosures where the HUD and VA programs have guaranteed the original loan, but not all foreclosures are backed by HUD/VA loans. More information on HUD/VA foreclosures Aren't these houses in bad areas, or in a horrible state of repair? Sometimes yes, foreclosures are in bad neighborhoods, and have not been very well taken care of. But it most cases, that is the exception and not the rule. As with any real estate purchase, a full home inspection should be conducted. Okay, this sounds interesting, where can I find a list of foreclosures? Most realtors keep lists of government-owned foreclosures, and some will work closely with banks and other lenders to sell their foreclosed properties as well. The best way to search all of these properties (sometimes known as distressed properties) is through a foreclosure search engine. Do I need to qualify for some special goverment mortgage? No, you don't. While you may fit the requirements for a HUD or VA backed loan, it is not a stipulation when buying a HUD or VA foreclosed property. Because of the myriad restrictions and regulations on those loans, most buyers and investors prefer to arrange their own financing. Mortgage recommendations. Are there any other real estate resources you can offer? Yes, please look at our resources page for other businesses we recommend. |
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