The Best Bargains on the Housing Market
What's the best type of home for someone living on a budget? An affordable home, of course! In today's economy, the most affordable home are usually foreclosures.
That's because foreclosure homes can be purchased well below market value, which automatically makes a foreclosure a good opportunity.
How so? Well, in an economy in which housing prices are falling, homebuyers who purchase foreclosures have the opportunity for a win-win situation if they make a smart buy; the home can lose value and the homeowner, because they purchased the home significantly below market value, still has the potential to post significant profits on the purchase.
Interested? Of course you are.
However, before you begin your hunt for a foreclosure, make sure you know the rules: Rule #1: Resist impulse buys.
If you heard about a 1,700 square foot, 3-bedroom, 2.
5 bath downtown condo being sold for $50,000 when you know condos that size go for as much as $250,000 (even today!), you might be tempted to jump at the deal.
Don't! The rule of real estate is: It is too good to be true until you've seen the place and inspection results yourself.
Why? Because anytime you buy real estate, you buy all of the property's "blemishes" too.
Warning: Steer clear of real estate classifieds and property auctions; both are notorious for inspiring impulse buys.
Rule #2: Choose your mortgage wisely.
Depending on the home, any of the common mortgage types may work fine for financing.
However, it's also a good idea to look into mortgage alternatives.
For instance, one option is to choose to have two mortgages, which in mortgage industry lingo is called having a first and second mortgage.
This option can sometimes help you secure a lower mortgage interest rate than if you attempted to finance a foreclosure through just one mortgage.
Another alternative is a HUD 203(k) mortgage, and it might be an even better mortgage option when buying a foreclosure; the HUD 203(k) mortgage loan can include the purchase price of the home and additional monies for home repairs.
Rule #3: Don't be greedy.
Buy the foreclosure for you, not your portfolio.
Why? The current economy isn't suited for landlords or flippers, and trying to be either in this market is risky business.
Now, once the real estate market is back on the upswing, you should consider purchasing a foreclosure as an investment (as long as you can afford to cover more than one mortgage if the investment doesn't work out as planned!).
Admittedly, foreclosures are the "elephant in the room" when it comes to real estate; people know foreclosure homes exist but they don't want to talk about them...
because foreclosures have a stigma.
The thing is: there are two sides to a foreclosure.
One side is the one most people think of, which is people being foreclosed on.
That, of course, is nothing nice because it does cause hardship and sadness.
However, the second side is that out of that situation, happiness follows; foreclosures make it possible for families who may have not otherwise been able to afford a home to live the American dream...
and it can make it possible for you to live the dream too.
So, don't be shy.
As you're looking for your next home, look for foreclosures too.
That's because foreclosure homes can be purchased well below market value, which automatically makes a foreclosure a good opportunity.
How so? Well, in an economy in which housing prices are falling, homebuyers who purchase foreclosures have the opportunity for a win-win situation if they make a smart buy; the home can lose value and the homeowner, because they purchased the home significantly below market value, still has the potential to post significant profits on the purchase.
Interested? Of course you are.
However, before you begin your hunt for a foreclosure, make sure you know the rules: Rule #1: Resist impulse buys.
If you heard about a 1,700 square foot, 3-bedroom, 2.
5 bath downtown condo being sold for $50,000 when you know condos that size go for as much as $250,000 (even today!), you might be tempted to jump at the deal.
Don't! The rule of real estate is: It is too good to be true until you've seen the place and inspection results yourself.
Why? Because anytime you buy real estate, you buy all of the property's "blemishes" too.
Warning: Steer clear of real estate classifieds and property auctions; both are notorious for inspiring impulse buys.
Rule #2: Choose your mortgage wisely.
Depending on the home, any of the common mortgage types may work fine for financing.
However, it's also a good idea to look into mortgage alternatives.
For instance, one option is to choose to have two mortgages, which in mortgage industry lingo is called having a first and second mortgage.
This option can sometimes help you secure a lower mortgage interest rate than if you attempted to finance a foreclosure through just one mortgage.
Another alternative is a HUD 203(k) mortgage, and it might be an even better mortgage option when buying a foreclosure; the HUD 203(k) mortgage loan can include the purchase price of the home and additional monies for home repairs.
Rule #3: Don't be greedy.
Buy the foreclosure for you, not your portfolio.
Why? The current economy isn't suited for landlords or flippers, and trying to be either in this market is risky business.
Now, once the real estate market is back on the upswing, you should consider purchasing a foreclosure as an investment (as long as you can afford to cover more than one mortgage if the investment doesn't work out as planned!).
Admittedly, foreclosures are the "elephant in the room" when it comes to real estate; people know foreclosure homes exist but they don't want to talk about them...
because foreclosures have a stigma.
The thing is: there are two sides to a foreclosure.
One side is the one most people think of, which is people being foreclosed on.
That, of course, is nothing nice because it does cause hardship and sadness.
However, the second side is that out of that situation, happiness follows; foreclosures make it possible for families who may have not otherwise been able to afford a home to live the American dream...
and it can make it possible for you to live the dream too.
So, don't be shy.
As you're looking for your next home, look for foreclosures too.
Source...