Why Real Estate is Best Bought After a Foreclosure
A foreclosed property is a home that was once owned by someone but had to be turned back to the mortgage holders because of an acceptance of a deed-in-lieu of foreclosure or because of the foreclosure action.Foreclosures no longer bear the negative stigma that was once attached, as banks used to view it as a sign of being irresponsible. This change in mindset came into place during the housing crisis of 2008/2009 when some of the most well-recognized people faced foreclosure.
Benefits of buying a home after foreclosure
One of the biggest benefits of buying a foreclosure comes from the chance of getting good deals. But every deal carries risks regardless of the rewards in the form of discounts. Some reasons why you should be looking to buy real estate right after a foreclosure are because of the following:
You may get a property at a price lower than its market value price. This can happen if the home is in pre-foreclosure stages and the owner wants to avoid going into foreclosure. Because these homeowners are in a hurry to sell off their property as soon as possible, there’s always a chance of the buying getting a great deal.
Banks often also offer foreclosures at discounted rates because longer the longer time banks hold these properties, the more money they should shell out in terms of maintenance, taxes, and other expenses.
Foreclosures can also be found in a variety of price points and sometimes need only minor upgrades and repairs to be A-Okay. With some minor repairs and upgrades, an owner can turn a foreclosure into a home of high property value.
How to prepare to buy again?
Many reputable bankruptcy, foreclosure, and modification law firms like Law Offices of Ronald D. Weiss provide free advice on how to prepare for a foreclosure purchase. According tosome experts, some things you can do to prepare and plan ahead are the following:
- Be aware that the waiting period of three years starts from the date of foreclosure completion, not date you left home or bank gave notice. So be patient and wait until the time you become eligible for conventional mortgage financing.
- Second, stay prepared to 10% down payment. It’s understandable that saving up for a down payment can be very hard for those looking to buy again after a foreclosure, but it’s something that must be done. Saving for this amount can be one of the ways you can show your commitment towards being responsible.
- Clean up your credit profile as much as possible. Sure the foreclosure will cause your credit ratings to take a massive hit, but you must try the best to ensure there are no errors on credit reports. If there are other accounts listed as in collection or past due, pay them off as soon as possible.
To buy a home after foreclosure has its benefits, but only if you know how to approach this situation correctly. Hopefully, this guide gave you some information how to get started.