It cannot be denied that the present housing conditions are creating great investment opportunities for buyers. If you even consider the housing supply and home prices, you could say that it is indeed a buyer’s paradise.
According to the US Bureau of Census, there are already about 18.6 million empty homes since the first quarter of this year. Approximately 2.3 million of these empty homes are categorized as unoccupied homes for sale. This was 3 percent more than that of last year.
The increase in the number of empty homes can only be attributed to the rising foreclosure rate experienced nationwide. Most of these foreclosures were the result of default ARMs or adjustable rate mortgages. This type of mortgage has been quite popular during the last housing boom and put many buyers in financial crisis. With interest rates resetting after a couple of years, many of the borrowers who took out this kind of housing loan found themselves with ballooning mortgage payments.
In addition, many borrowers were approved for mortgage amount which they could not really afford. Because of relaxed and aggressive lending guidelines, many of these borrowers were not actually qualified. And now they have to deal with what the experts call as “upside down” mortgage or mortgages whose balance is now more than the property’s present market value.
It did not help that the growing inventory of foreclosure homes has caused home prices to drop dramatically in areas hit hardest by the mortgage crisis. For this reason, properties that were once affordable to only a select few are now within the reach of average borrowers.
The only problem with the current housing situation is that it has prompted most lenders to tighten their underwriting guidelines. But if you have a high credit score and unblemished credit record, you will have no difficulties getting approved for a mortgage and buying one of these foreclosure properties.
Cassiano Travareli has been educated in the finer points of the foreclosures market over 5 years.