Santa Monica Foreclosures and What Buyers Want to Be aware of About Them Tip 835

The capitalist world in which we live is made of lenders and borrowers

. The borrower will pay the lender back the full amount usually plus a small interest charge over an agreed period of time. Those looking to purchase Santa Monica foreclosures however don't usually need finance. The lender's risk comes primarily from the chance that the borrower will not make good on their payments. Insurers therefore usually need some form of assurance that you will be able to pay. This is true in almost all the markets of capitalism but is especially true in real estate markets. Often times, the lender in a real estate market, such as a mortgage company or bank, will be confident that the borrower will make their monthly mortgage payments, but will be concerned that the borrower will default on their homeowners insurance or property tax paymentsThe big worry for banks who lend to you to fund your house purchase is not that you will not pay back the loan, but that you may default on your property tax repayments. Financers usually don't have that much to be worried about in terms of the financial status of those purchasing Santa Monica foreclosures.

If for example a borrower defaults on insurance then they their home won't be protected. If the property is then destroyed and the insurance was defaulted on, the owner can walk away and has no obligation to pay the bank back often. If the borrower does not make their property tax payments, then the government can put a lien on the home. If either of these two scenarios come true, it is a disaster for the lending institution. To insure that the borrower makes their insurance and tax payments, both parties will want to set up an escrow account. This practice is popular in California, particularly with the buying of Santa Monica foreclosures.

An escrow service basically holds money until the transaction calls for it to be released. This practice is commonplace in California, especially when it comes to Santa Monica foreclosures. To help give an example of how an escrow works, let's say there are two buddies who both make a bet on a football game and they give their money to a third friend to hold on to the money until the game is over and this friend then gives the money to the winner of the bet. This method ensures that whichever friend wins will receive their money.

In terms of real estate, an escrow account is essential. If a borrower has one annual property tax payment of 3,000 dollars and an insurance payment of 500 dollars, then there is a great chance that when the time for the payment comes, the borrower will not be able to make the lump sum payment. Therefore, in order to avoid this situation, the borrower will pay monthly into an escrow account. Those looking to purchase Santa Monica foreclosures won't usually need this part payment option!

If you're after inspiration in terms of a location to move to then search for Santa Monica foreclosures.

Santa Monica Foreclosures and What Buyers Want to Be aware of About Them Tip 835

By: jonas97reilly

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