subject: Advantages of Buying Pre Foreclosed Homes [print this page] Advantages of Buying Pre Foreclosed Homes
Pre foreclosed homes are those residential properties whose owners have defaulted on their loans and are facing the possibility of getting foreclosed. Although this is one step away from foreclosure, it is definitely a better position to be in than being foreclosed. Closing a pre foreclosure sale has advantages for both the buyer and the homeowner.
What Is Pre Foreclosure
Once a homeowner defaults on his mortgage loan, the lender has the right, after a certain period of time, to file for a notice of default. A copy of this will also be sent to the homeowner which will officially start the process of foreclosure. A homebuyer is provided with several options on how to stop the foreclosure, including selling the home directly, offering it for a short sale or paying his mortgage and making the payment current.
Advantage to the Buyer
Home buyers who are quick to find out about pre foreclosure sales will have the benefit of acquiring a low-priced dwelling without the troubling procedure involved in a foreclosure purchase. Most of the time, homeowners are eager to sell during pre foreclosure since it could save them from the trouble of paying for a mortgage that they can no longer afford, with a possibility of earning something from the sale.
Advantage for the Homeowner
Selling pre foreclosed homes also benefit the homeowner. The biggest advantage is finding a way to unload a property that he can no longer afford to pay using a process that has relatively less pressure. Depending on the amount by which the home will be sold, he can pay his loan and even earn something back from the sale.
Furthermore, his credit score will not suffer since pre foreclosure does not carry the same negative weight as an actual foreclosure. This leaves him with a better chance of acquiring another mortgage in the future or at a time when his financial status is more stable and he wishes to purchase another home.
Transactions that involve pre foreclosed homes have huge benefits for both homeowners and buyers. They also benefit the neighborhood where the home is located since they will help minimize the number of unoccupied dwellings that cause blight and community decline.
