If you're looking to buy a new house, you might become discouraged after learning that most homes in your local market are priced outside your budget. You can continue renting and wait for the market to improve, but if you're interested in buying sooner rather than later, you might get an excellent deal buying a foreclosed home.
A foreclosure occurs when a homeowner can no longer afford their monthly payment. Once they default, the lender might begin the foreclosure process after 90 days. This isn’t the best circumstance for a homeowner, but as someone looking to save on a home purchase, a foreclosure can be a solid deal for you. Just know that many foreclosures are sold as-is, so you'll probably have to update or make repairs.
Mortgage Loan Options
When you apply for a mortgage loan, let the lender know your interest in buying a foreclosure. Many banks and credit unions offer loans specifically for first-time homebuyers and people buying distressed properties. You might get a mortgage that not only covers the cost of the home but also offers additional funds to update the property. This can relieve some of the financial burden of updating the home.
GOBankingRates can help you find the perfect mortgage loan if you're interested in buying a foreclosure — or any property for that matter. The site features a free bank search tool. After entering your ZIP code or city, you can search lending options and choose the bank that's right for you. You can compare mortgage loan products, terms, interest rates and more.