What is a foreclosure? What does it mean?
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Foreclosure happens when the owner fails to make their payments and the home becomes bank owned as a result. Foreclosed homes are often in very poor condition and not always the deal that they appear to be. Competition is fierce and unless you have a very strong cash position and the ability to make major repairs---be careful. If you are looking for a deal--look for properties where the seller is very motivated to sell--divorce, estate sale (probate). Also, shop for sale by owner properties---The National Association of Realtors study discovered that FSBO sellers got about 16% less for their homes in 2005 than properties listed with a Real Estate broker
The lender takes possession of the property if payments are defaulted (not kept up to date). Why do you ask?
When a homeowner fails to make payments on his/her loan, a bank or mortgage holder will foreclose upon the house. This means that the bank will take the house from the homeowner and sell it to satisfy the debt resulting from the unpaid mortgage payments.
If you bought a home and took out a loan to pay for it then you pay a mortgage payment every month to the bank.If you miss one payment, you get a warning. If you miss two payments, the bank who loaned you the money has the right to try to take the house from you and starts a process called foreclosure. Even if you have been paying payments for years, they can eventullay take the house away from you and throw you out. The house is "in foreclosure: dor a period of time, the bank would rather you make payments and pay penalties before the house is "foreclosed". If the house has foreclosed, it means the bank has taken back posession and you no longer own it. The bank tries to sell it to someone else that will make the payments on time.
it is pretty much when a home owner stops making payments on the house! and the bank instead takes their house n kicks em out! but its good for first time buyers! very low prices for buying houses!
If you're looking for foreclosures that are for sale, these are homes that were repossessed by the bank. You can usually purchase them at a price much lower than their market value because the bank is just looking to recoup its loss. Just be sure to have a licensed inspection before purchasing any house so you know what you're getting. Also make sure that you get a title search so you know that there are no other hidden liens on the property, which could come back to haunt you even if you were not the owner when the lien was placed.
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