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Government Loans To Help Stop Foreclosures
Are you of many Americans who struggle with mortgage payment and foreclosure? If so, don’t feel despair. Uncle Sam can help. In response to housing crisis, the Federal Housing Administration offers financial relief with the FHA Secure Refinance Program. More...
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Buying And Flipping Foreclosures
| With the economy heading into recession, foreclosure rates are expected to break a new record this year. The recent statistic shows that more than one million homes are now in foreclosure, and the number will continue to climb. |
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On the bright side, now is a one of the best time to buy a home in the real estate history. You can potentially save even more by buying foreclosed homes from a bank or other financial institutions. Typically, foreclosed home is about 25% cheaper below the full market value of a home. This year, however, the average may not be as attractive as the other years, because many of foreclosed homes stem from problems in the subprime mortgage. Many of foreclosed homes today are new homes with very little or no equity. Most lenders are trying to recover close to full market value of the house. There are three ways that you can buy a foreclosed property.
- Pre-foreclosure. Basically, you buy directly from a homeowner before the foreclosure. Pre-foreclosures require the least amount of funding. With a pre-foreclosure, you need to acquire mortgage and any back payments. You may make up to 10-20% with pre-foreclosures on average.
- At Auction. Depending on where you live, auctions can be held at various location like county clerk’s office, courthouse, or even in front of the foreclosed house. Although the profit from auctions may be as high as 40%, it also carries the most risk. Buyers can not inspect home in advance and they have to pay up front cash. In certain circumstances, current homeowner will refuse to move out.
- Real Estate Owned properties (REO). Purchasing a home from REO is probably the least risky. The foreclosed property will be fully inspected. Homes that are sold this way tend to be in better shape. The disadvantages are you probably won’t get better price than dealing directly with homeowners.
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