Maximize Savings With Real Estate Buying Bank Owned

The goal of real estate buying bank owned is to obtain maximum savings when investing in foreclosure homes or commercial properties. It is estimated over 2 million properties are listed for sale through banks, most of which are priced below market value.

Participating in real estate buying bank owned can save buyers money. However, the process is usually more arduous than buying realty directly from property owners. This is because banks must carefully assess purchase offers to minimize financial loss, as well as the fact that multiple buyers compete to purchase the same piece of realty.

Prior to the foreclosure crisis, people often purchased repossessed real estate through foreclosure auctions. Today, many turn to banks because properties are sold with a clean title and all the dirty work has been completed.

Once banks regain ownership they evict homeowners refusing to vacate the premises and remove judgments and liens attached to the property. In some instances, banks engage in repair work to improve property condition and make it more salable.

Properties held by banks are sold in \’as is\’ condition and often require minor repairs. Oftentimes, buyers are able to purchase properties at 20-to 30-percent below property value. This can be advantageous when applying for a mortgage note and may minimize the down payment requirement.

Buyers should spend time scouting out government sponsored programs that allow them to save additional funds when investing in bank foreclosures. One popular program is the Fannie Mae Homepath program. Another is HUDs Neighborhood Stabilization Program offering home buying grant money. In certain situations, these programs can be combined to obtain maximum savings.

Fannie Mae Homepath offers residential foreclosure houses across the nation. These homes were either repossessed or returned using deed in lieu of foreclosure. The primary role of the Homepath program is to help individuals become homeowners.

Fannie Mae homes can be financed through Home Path Mortgage or buyers\’ lender of choice. Home Path Mortgage lets borrowers provide smaller down payments than required through banks. Additionally, buyers are allowed to obtain down payment funds from outside sources; a practice that is normally prohibited.

Real estate investors can take advantage of discounted Fannie Mae homes as well. However, investors cannot submit purchase offers until properties have been on the market for at least 15 days.

HUDs Neighborhood Stabilization Program is governed under the Community Reinvestment Act (CRA) established by Congress in 1977. The program provides grants to qualified buyers that purchase real estate in areas with high levels of foreclosure.

NSP grants can provide buyers with up to 20-percent of the purchase price and help offset repair and renovation costs. Funds do not have to be repaid as long as buyers remain in compliance with program terms.

Purchasing Fannie Mae properties financed through Home Path Mortgage and combined with NSP grants can lead to substantial savings. The process will take longer than buying houses from private sellers, but those who can wait it out find the savings worth the effort.

Buyers with bad credit should strive to improve FICO scores before buying houses. Doing so allows them to obtain the lowest mortgage interest rate. However, Home Path Mortgage does offer financing options for those with credit blemishes.

Prior to engaging in real estate buying bank owned, take time to learn how the process works and become familiar with government programs. Also consider obtaining housing counseling through HUD to determine which programs are best suited for your needs.

Author Bio: Author and investor, Simon Volkov shares additional real estate buying bank owned strategies to maximize savings via his realty investing website. His expansive article library covers topics of buying houses with creative financing and various ways to buy foreclosure houses at

Category: Real Estate
Keywords: real estate buying bank owned, home path mortgage, fannie mae homepath properties, nsp grants

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