Bank Foreclosure: 3 Points You Need To Know

What is a bank foreclosure?Unless you have been hiding under a rock you already, know that the housing market in the United States has been tumbling in value, which is caused partly by the number of homes that are facing foreclosure.In many cases, the borrowers of these loans failed to make their monthly payments as they had agreed to.  In turn, the bank, which held the mortgage on the home, was forced to take back the property in the hopes of selling it and getting out of the debt.This is precisely what a bank foreclosure is.  It is a home that is owned by a bank that held a mortgage on a home in which the owner failed to keep up with their monthly payments.

These homes are now on the market and being sold. There are many misconceptions about these homes and often people do not realize that they make a great investment.Here are three things you need to be aware of regarding these foreclosures.

1: Bank's Sell For Less, Often

One of the key benefits of buying foreclosure homes is that the bank is often willing to sell the home fast even at a discounted price.Their business is not owning these homes and therefore they need and want to sell.Often, bank foreclosure homes will be sold for less than their appraised value.  What this means to the average lender is that the property is quite profitable to them.

2: Bank Owned Homes Aren't A Mess

Many people feel that bank foreclosure properties are properties that are run down and beaten up.  In fact, they are homes just like any other you would walk into in the hopes of buying them.The upside to this is that these bank owned properties are often in good condition.  Many offer a range of opportunity for low cost, without a lot of repair.With that said, you should realize that it is still necessary to invest in appraisals and home inspections to insure you understand the level of need the property presents.

3: Regular Home Loans Work

Another misconception people have about bank foreclosure is that these homes are being bought solely by the well heeled who can afford to fork over a great deal of cash.While some investors do this, most do not because it takes a bite out of their reserves.In addition, anyone can purchase a foreclosure with a standard home loan.

Bank foreclosure is not an appealing picture for many people, but for real estate investors, it can be an opportunity to get into a more affordable home quickly.

For more information please visit our Foreclosure Guide and our Loans Blog