What Are Foreclosure Homes – Brief Overview
One of the best investments that you can make with your money, especially if you are thinking about preparing for your retirement and future, is real estate. Over the last several decades, real estate prices have continued to rise at a very steady rates. Although in the past decade there have been some declines, the price of homes is continuing to rise, making the purchase of homes and property for an investment purpose a very lucrative decision. Purchasing a foreclosure is one way that you can get the lowest possible prices for homes of exceptional value. As a result of the banking fiasco a few years ago, there are literally thousands of foreclosures coming on the market every day. In this article, we will discuss foreclosure homes, and why this might be one of the best investments you ever make.
What Are Foreclosure Homes?
When a home goes into default as a result of the buyer or borrower being unable to make their monthly payments, the bank will take possession of the home as collateral, and subsequently sell it at an auction in an attempt to get the money that is owed to them. This can happen for a number of reasons. People may lose their jobs, go through a divorce, or they may have taken out a loan with a variable interest rate that now has a monthly payment they are unable to afford. In most cases, the lender is required to send quite a few notices to the borrower about their delinquency. However, if the buyer is unable to catch up on their payments, they will be forced to vacate the premises, and the home will go into foreclosure.
Different Categories Of Foreclosures
When asking what are foreclosure homes, the answer is sometimes very diverse. For instance, there are bank foreclosures which involve a foreclosure by the bank and the home sale at an auction as previously discussed. There are government foreclosures which are properties in default which were funded by FDIC, FHA, or HUD. When talking about pre-foreclosures, this is usually a tactic on the part of the borrower to escape financial ruin. Whatever proceeds are made from the sale of the home will be returned to the bank in order to pay off the loan. And finally, there are tax foreclosures which are the result of individuals not being able to pay their taxes.
Concerns Regarding Purchasing Foreclosures
If you do decide to purchase a foreclosure, there is research that needs to be conducted. For instance, you need to make sure that there are no liens on the property itself. If you take ownership of the property, and the liens were not paid off, you will be responsible for paying these as well. Depending upon how many liens were on the property, it could become a financial burden, not an investment, when purchasing a foreclosure of this sort. These liens could be filed by the bank, tax collectors, or individuals that were owed money as a result of helping to construct the home. As long as you do your due diligence, you should be able to find a foreclosure without any liens at all.
Depending upon where you live, the foreclosure process can change from state to state. You will simply have to visit your county courthouse and ask what are foreclosure homes in this area like, and if there are any auctions or tax lien sales. You can also ask individuals in your community for help, especially if they do this on a regular basis. Hopefully this information on foreclosure homes, and how you can profit from them, will help you make a wise investment today.