More than a third of all properties purchased by home buyers are foreclosed properties. A home that has been foreclosed on means that the owner failed to make timely payments on their mortgage. Eventually, the bank repossessed the home due to nonpayment and placed it on the market, usually at a much reduced rate.
The first step in buying a foreclosed property is finding a real estate agent who has experience with transactions involved foreclosed homes. Orly Chen has a firm grasp regarding every aspect of obtaining a foreclosed property, including whether the bank’s price is fair, determining the values of neighboring homes and inspecting the property’s background to ensure there are no liens or maintenance problems with the home.
Financial experts suggest going over your monthly credits and debits before deciding to buy a foreclosed home and making sure that no more than 35 percent of your gross income is being applied towards the mortgage payment.
Depending on the type of loan you plan to obtain, you could participate in what is referred to as points, which are fees paid to the bank or mortgage company from which you are borrowing in order to receive a reduced rate of interest. One point equals one percent of your loan amount, or $2,000 out of every $200,000. What sort of interest rate you receive after paying points varies among lenders so inquire about the amount of the reduction before deciding to go with a certain lender.
The Closing Process
Having a professional real estate agent at your side to take you step by step through the closing process is the best way to facilitate the purchase of a foreclosed home. In addition, the immense amount of paperwork involved in buying a home is overwhelming and sometimes frightening to first-time home buyers. Having a knowledgeable real estate agent to help walk you through a home closing greatly reduces the stress of dealing with complicated and legally obtuse instruments.
Documents like loan papers, settlement statements, promissory notes, deeds, mortgages and the truth-in-lending statements need signed by the individual(s) purchasing the home. The loan company foreclosing on the home will have one or more representatives attending the closing, with one of the representatives possibly being an attorney.
You will also need written evidence that the home was inspected and that you have already secured the necessary insurance required by New Jersey homeowners. Once all papers have been signed, the buyer then submits a check to cover the closing costs and down payment before receiving the keys to the purchased home.
Foreclosed properties can be bought at prices substantially lower than market value due to mortgage companies simply wanting to recoup their losses. If you are interested in comparing Bergen County foreclosed homes, contact Orly Chen agent for professional and dependable advice regarding the purchase of foreclosed properties.