Buying Pre-Foreclosure Homes ~ Real Estate Facts


Thursday, October 8, 2009

Buying Pre-Foreclosure Homes

There are many ways to make money with real estate that is about to go into foreclosure. Foreclosure is a process that a property will go into if the mortgage is not paid on time. The bank that holds the mortgage will send a notice to the owner of the property. This notice usually tells the owner of the property that the property is under delinquency, witch means all the payments are not up to date.

One way you can make money with this and help the property owner is by buying the property from the owner. The owner does not want to mess up his or her credit and get kicked out on the streets. This is why he or she will be more motivated to sell it to you at below market value. When doing this you must find out how much equity the owner has in the property, if the mortgage can be assumed, the interest rates of the mortgage and if there is any liens on the property. Equity is how much of the mortgage is paid off so far, and when a mortgage can be assumed it means that it can transfer to a new person with the same interest rates. Liens are put on a property if the property is put up as collateral. Liens have to be paid by any one who owns the property.

You can buy the house from the owner for the equity he or she has in the property, assume the mortgage and rent it out to the previous owner. It is important to do a credit check on the owner. If your credit is better than the owner, when you assume the mortgage you can do a refinance and get a lower monthly payment. This method takes a lot of time but if it is done right not only you will be getting a property below market value but you will also be helping someone out in the process.

1 comment:

  1. This is a good option. I think this is a great way to buy property at best prices. In addition, no one prefers to opt for foreclosure and direct sale can benefit owners in terms of credit reputation.
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Buying Pre-Foreclosure Homes ~ Real Estate Facts