subject: Buying foreclosed properties with lower interest rates [print this page] Author: Anirban Bhattacharya Author: Anirban Bhattacharya
The real estate market is going through yet another phase of doom. Hence, its a common sight today to see bank foreclosed homes for sale. On the other hand, if money is not an issue, the timing could not have been better to buy foreclosed properties with low interest rates. How a foreclosed property does come into being? A person in financial need puts up his/ her property assets as security. The bank in turn sanctions the loan at a specified interest rate. All is well as long as the interest amount is being remitted by the borrower. But in case the borrower defaults, the bank forecloses the property, that is, obtains the right to resell the property to recover the money it had lent. On the flipside, it becomes a good bargain for the property hunters. What motivates the first-time property buyers as well as seasoned investors to buy from foreclosed properties is certainly the cost advantage that it offers. Why do bank foreclosed homes for sale usually offer very lucrative real estate deals? The banks main business is not to buy or sell properties for profit. The bank or any other lending company for that matter also cannot afford to deviate from its mainstream business that is to lend money and recover the same from defaulters. As a result of lending business, the banks usually end up with many foreclosed properties. The recovery must happen on as soon as possible basis. Holding the properties costs the banks heavily in terms of interest forgone and property maintenance cost. So, there is an obvious hurry between banks to sell off their properties, even if it means low prices and extending home loans at lower rates of interest. Conclusion If you are a first time buyer or hoping to swap your old home for a better one it is best to keep an eye on bank foreclosed homes for sale, however, in the expert guidance of a professional advisor. To buy foreclosed properties is a tricky job and the expertise would make sure that you seal a deal yourself, rather than just be a witness.About the Author:
