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How to buy foreclosed home by Bank?
When a low-income person needs a property whether to resell, rent or live is a good option buy a repossessed property (foreclosed). This type of transaction is very popular among investors and real estate professionals. Since this type of houses has a very low price compared to others.
How to buy a repossessed house?
To tell the truth, it is not necessary to be a wealthy investor or to know everything about the real estate business. This is a very quiet and simple process if you are advised by a real estate professional. Apart from that this is a viable option for people in whose cases economic resources are limited.
Why the repossessed property has a low price?
The low price is due to how banks acquire these properties. These are repossessed by the bank when the owner has irregularities in the payment or does not comply with what is established by the bank. In that case the bank being the mortgagor this takes possession of this and tries to sell the property as quickly as possible to avoid greater losses.
There are multiple benefits when buying houses in auction. Reselling the property you will receive more than you invested.
Usually banks sell this type of property with a discount of 20% but this discount can reach up to 60%, being that the case you will enjoy a very good profit. Due to this, if you plan to live in that property your monthly payments will be significantly low.
If the case is that you plan to rent the property that is a very prudent decision because this would be generating a passive and fixed monthly income entry.
Below we detail in 3 simple way the most common ways of owning a home in auction:
1- Short sale (Pre-execution): Before the bank executes the mortgage the owner of the property will be ready to sell to the highest bidder and thus save your credit, that is the crucial moment when you can make your offer to the owner. In this case the 3 parts come won.
2- Once the mortgage is executed many times the banks opt for the option of auctioning off these repossessed properties, this is a very good option to acquire your house at a low price.
3- On other occasions, the bank does not seek an auction but tries to sell them but this sale must be made as soon as possible and considers any reasonable offer to eliminate this property from its inventory since the maintenance of these is expensive.
Housing and Urban Development: banks have certain loans guaranteed by HUD in this way these banks can offer more facilities to the public in terms of housing loans. Given the case in which the borrower is not able to pay their debt. HUD reposes the houses and puts them up for sale.
In this case, anyone can buy a HUD house and can even ask for a loan to improve the property. HUD also offers discount programs in which preferential treatment is given to people with public social positions such as teachers, police firemen, etc.
What is VA?
VA (Veterans Administration): helps members Veterans and eligible surviving spouses become homeowners. As part of government programs to help war heroes. The gov provide a home loan guaranty benefit and other housing related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy.
The houses are auctioned at a very low price, but it is not necessary to be a veteran to apply.