Is buying foreclosed homes a good idea?
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Is buying foreclosed homes a good idea?
Buying a foreclosed home can be a good idea if you have the financial cushion to absorb any potential problems. If you aren’t worried about there being potential issues or the cost to repair them, then buying a foreclosed property is likely a worthwhile investment for you.
What is the catch with foreclosed homes?
Buying a foreclosed home is riskier than buying a home that’s owner-occupied. Below are some of the drawbacks to buying a foreclosed property. Increased maintenance concerns: Some homeowners have no incentive to maintain the home’s condition when they know they’re going to lose their property to foreclosure.
How do you buy a foreclosed home in Michigan?
Steps to buying a home
- Initial consultation with a loan officer.
- Get a Mortgage pre-approval.
- Place an offer on a home.
- Start a mortgage application.
- Submit documents to underwriting.
- Complete home inspections and the Home Appraisal.
- Schedule the closing with your Realtor and the home sellers.
Why is buying a foreclosed home bad?
If you buy a property at a foreclosure auction, not only will you not get a chance to have the home inspected, it’s likely you won’t have stepped in the door before you become the legal owner. It’s possible the property has been vandalized or looted; appliances and light fixtures may be missing.
How does foreclosure work in Michigan?
In Michigan, most foreclosures are done without going to court. Foreclosure starts when your lender says it will exercise its right to sell your property unless you catch up on your payments or make other arrangements with it. Your lender is the bank or company that holds the mortgage on your house.
Do banks lend money for foreclosures?
With short sales or bank-owned (also called real-estate-owned or REO) properties, you can finance the purchase with a mortgage. In fact, it’s common to do so. Wells Fargo says approximately 60\% of its foreclosed homes are purchased with financing. It is at foreclosure auctions that paying in cash is usually the rule.