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Three Important Factors That Can Help You Determine When Is The Best Time To Buy Foreclosures



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By : Karim El Sheikh    99 or more times read
Just ask any real estate “expert” and he or she will tell you the same thing: If you can afford it, the best thing to do is hold on to a house for five years to recoup your investment. Of course this nugget of wisdom does not apply to soaring markets that suddenly come crashing to Earth. Finding the best time to buy all depends on several factors.


The Market

One of the first things you should look at is the overall market condition. Market values differ from location to location. For instance, Florida home values are finally starting to trend upward again, while those in Ohio are still heading south.

Buy low and sell high – that is the conventional wisdom at work. Before making any decision, you need to be aware of where the market is headed. With this in mind, it is best to take caution and see what is going on first.


The Buyer (You)

There are three main reasons people end up being unable to make mortgage payments – divorce, health reasons and change of job status. Any of these, or others, can have a negative impact on one’s financial capacity. Of course, turning the table means having enough money to afford foreclosed properties. In a nutshell, your ability to buy all comes down to major life events.

Moving out within five years? Are you expecting a baby any time soon? Have you recently filed for bankruptcy? Do you have a credit score of less than 630? If you answered yes to any of these questions, it is not a good idea to get involved in foreclosure investing for you. It is best to wait a bit until all is clear.


Financial Situation

Your own financial situation is of course a key element in your venture into foreclosure investing. With rising debt and a stagnant income, you are putting your financial future in jeopardy. Not even low- or no-downpayment schemes offered by some lenders may be able to save you.

If you do get your mortgage application approved, it is highly likely that you will get higher-than-normal rates. This is what happens to people who are recovering from a bankruptcy or still repairing their credit score.

So what should you do at this point? Buy before prices start going back up but with an expensive loan? Or perhaps wait until you get better mortgage rates just as prices have possibly gone up? This is the kind of dilemma you can expect and should be thinking about before attending open houses.


First Things First

Being patient is still the best course of action you can take as far as buying foreclosed properties are concerned. You have to be familiar with the market first by going to open houses. Talking to a mortgage broker is a good way to get pre-approval, which is a good thing in the long run. At the same time, become familiar with agents and benefit from their experience and know-how.

Reviewing credit scores and reports also helps determine if repairs are necessary. Find a neighborhood that suits your taste then gather as much information as you can on it. This should give you a better idea on the lay of the land.
Foreclosure.com is the top resource for homebuyers and real estate investors looking for a great deal. Search all foreclosure, preforeclosure, hud home, and short sale listings nationwide.

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