Quick Tips about Financing Foreclosures in Grand Rapids, Michigan
How to finance a foreclosure has been a popular question for me lately in this Grand Rapids, Michigan Market. There are many homes in Grand Rapids, Michigan that in foreclosure right now that many purchases that I’ve financed over the past 6-12 months have been properties that have been foreclosed on. A home goes into foreclosure when the original owner of the home fails to keep the commitment of the original loan they signed when they purchased or refinanced the home. Once the foreclosure process is complete, the bank will typically become the owner of the home.
Financing options for a home that has been foreclosed on is not that much different than if you were buying a home from a family that is living in the home. The main difference is that you are negotiating with a bank who is the owner and not an individual or a family. Mortgage options for a buyer are still based on credit scores, income level, down payment or assets available, and the property type.
The biggest concern most lenders have when lending money on a home that is in foreclosure is the current condition of property. Foreclosure is a difficult thing for anyone to go through and often times a disgruntled home owner will destroy or take many of the big ticket items from a home with them when they are forced out of the home. I have seen people take out kitchen sinks, counter tops, flooring, water heaters, plumbing fixtures, etc…
The media glamorizes the opportunity to make a lot of money on foreclosures. I believe there are great opportunities to buy today and it may not necessarily mean the only good deals are on bank owned properties. When purchasing a home you have to ask yourself, what is my motivation for purchasing a particular home? Do you want to purchase a home for your family to live in for the next 10 years that will not require a lot of work? Do you want to buy a property that is terrible condition, renovate it, and sell it as quickly as possible? Any type of home purchase is a large investment and whether a home has been foreclosed on or not should not be the end all reason for purchasing a particular property.
If you are interested in purchasing foreclosures or other distressed properties I would suggest seeking out the advice of a couple professionals early on in the process. This type of transaction has the potential to be more complicated than most and requires the skill and expertise of experienced mortgage professionals and Realtors.
I look forward to hearing any questions or concerns you may have about this post. Please let me know if there is anything specific you would like to hear from me about.
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