We are living in a time when the economy is affecting so many of us in the area of finances. With that said, many tend to search out ways to save money in all areas. One of the biggest ways some go about doing this is to purchase a foreclosure. Just imagine, getting a nice and sometimes huge home for a fraction of the original cost with a very small mortgage payment.
That is enough to excite anyone. But this experience should be cautioned with sound advice and a review of your financial picture before going for this good deal.
For some people, purchasing a foreclosure is the best thing that has ever happened to them. To others, it is a headache with upkeep and dealing with all of the hidden issues that the inspector didn’t see when you bought the home. For example, I bought a foreclosure in 2008 in the DeKalb County Area. What I thought was a good deal turned out to be a constant test of my faith and finances.
During my four years in this home, I had to file a few insurance claims due to a sewage backup into the home. I always got great service from my homeowner’s insurance company. I would of never thought that I would get into my fifth year with them and be told that my insurance policy is non-renewable. Like others, I am the kind of person that has all of my insurance needs with one company to bundle them for a good rate. At no time would I imagine that I’d have to start all over again and find a new insurance policy for my home.
At my time of opening these claims, I was told several times that my insurance policy would not be affected. It worried me because I have heard consumer gurus say to look out for insurance companies doing this. So, that is why I asked. Well, today I feel that by sharing my experience with others, it will equip so many people with the power to make a well thought out choice concerning your home buying needs.
I personally think that a person should not buy a foreclosure unless you have the kind of cash reserves for upkeep because a foreclosure is unpredictable. I think that these homes are better suited for an investor that has the cash reserves to fix and thoroughly inspect what the initial inspector did not find during the purchase process.
It was a challenge to find a company that would insure my property, but I have at double of what I was paying before. I have learned when life hands you lemons; you can always make lemonade. And that’s what I have done.
What are your thoughts? With the recent housing crisis, do you plan on buying a foreclosure? Have you really thought this process through? Do you have a backup plan for when things become awry in your home?
Foreclosures have many hidden issues; only the family that left the property really knows what the real issues are. Do you have some foreclosure purchase horror stories? Or, have you been able to make it work for you? I would like your thoughts.