If you have been considering the idea of purchasing a foreclosed home, you really must educate yourself with what it entails before you consider making any kind of move. Sit down and consider what you want.
Do you want to live in it and make it your home or will you use it simply as an investment? Once you decide what you want from a foreclosure then you want to find out everything you can about this process. Preparing for this takes time so you cannot rush through searching and buying just any foreclosure.
Finances are probably the biggest concern so you must determine what you can truly afford before you search for any foreclosure. You must determine what you can actually afford as far as making monthly payments in addition to getting approved for a loan.
If approved you should put extra money in a savings in order to have available cash for other areas, which will include your down payment. Most of the money saved usually will go towards the down payment and for any potential home repairs.
If you decide on purchasing a “fixer upper”, more than likely it will need a lot of work, so this must be factored in. Many areas of the home may need to be updated or remodeled. Flooring may be an issue and the carpeting may be old and dirty and may need to be removed and replaced.
If there are appliances, you must ensure that they are working properly or they also must have replacements. Plumbing issues can also be a problem, as well as the roof, which must be check for leaks. The work that will be required will be overwhelming at times but on the other hand, it can be rewarding. It can eventually bring you enjoyment either for living there or for investments.
You want to be sure you choose the best foreclosed home which can be very intimidating at first. Start out by compiling a list of the basic needs for the house such as what size you want and the location you prefer. You can start your search by viewing newspaper classifieds or on-line real estate web sites.
- Have a plan of action before you begin you search. You must also know the reason why you want to purchase a foreclosure (for investment or to live in). In addition you must know how you will handle any repair costs, keep a schedule and when you will sell it (if an investment).
- Investigate the housing market as it fluctuates. Today can be great for a buyer but tomorrow can be a seller’s market. Interest rates and loan terms vary or lenders might use extra caution while writing loans due to sky-high interest rates.
- If foreclosures are common in the neighborhood you wish to buy then avoid it. This is an investment and you want your home to increase in value – soon.
- Do not make any offer on a home before inspecting the property.