A foreclosure house is one for which the owner has legally lost property rights over due to failure to repay mortgage debt when the property has been used as a deed of trust to acquire the loan. Thus the house becomes property of the court and is subjected to a forced sale by means of an auction. The auction is announced and advertised at the courthouse and in leading newspapers. Anybody interested in bargaining for this piece of property can attend the auction including the financing company on whose name the borrowed money is indebted to. The financer also has the option of using the note stating the pending payment to bid for the foreclosure property.
A type of foreclosure called foreclosure by power of sale is one in which, the power to auction off the mortgaged property is solely in the hands of the financer and is free of judicial supervision or intervention. The financer may also grant the mortgagor extra time to repay the borrowed cash by modifying the mortgage statement legally. The borrower will have to repay the debt within the grace time including extra expenses and interest.
The mortgager also has the option of signing the foreclosure house off to the financer to avoid going through a foreclosure. This may also provide the mortgagor an opportunity to purchase a house after a period of a few years provided his credit has been flawless. Such a purchase will however include a high rate of interest to be paid.
Paul manages a national car rental agency, and Kim is a bookkeeper at a local pet store. Together they earn $80,000 a year before taxes.
Neither Paul nor Kim has experience buying a home so they call a realtor first for advice. They learn they can get a mortgage that includes taxes and homeowners insurance for $1,933 a month.
It really helps Paul and Kim to know how much money they can borrow.
Soon they find a home they really like in a nice neighborhood. Three bedrooms, two bathrooms, den, garage, and lots more room.
The home is bigger than they need for just the two of them, but the additional space will come in handy. They plan to have two children someday.
They decide to make this their first home.
They don't need a house this big and the price is higher than what they want to spend. They can borrow the money, so they go ahead.
Both of them are working and they get regular raises. Their money maybe tight for sometime and it will be worth making temporary adjustments, won't it? Isn't home ownership the American dream?
Five years later with two kids and a dog Paul and Kim's somewhat tight budget is now very tight.
Their salaries have stayed the same and after 9/11, Hurricane Katrina, and the war in Iraq almost everything costs more, especially energy. Their finances are a series of budgets and sacrifices with no end in sight.
Paul and Kim are not alone. Many people when buying a home do not think about how much a home costs to operate. Hot water, heat, and air conditioning all add up. They did not check or they might have kept looking for their dream home.
What was once an affordable three bedroom, two bathrooms home can now be very expensive to keep warm and or cool? Energy expenses can total as much as the monthly mortgage payment.
If a home is new, ask the builder if it is energy rated. An energy rating provides information about energy costs. It is a tool for the consumer.
Add a home's energy costs together with the mortgage costs. Then you will know if you can afford it.
Beware or you too will end up being "House Rich, Cash Poor".
Paul and Kim liked how the house looked in the beginning but after a while, that good-looking home turned ugly when they became a slave to high-energy costs.
Both Joseph Smith & Energy Efficient Homes Team are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Joseph Smith has sinced written about articles on various topics from Foreclosure Help, Real Estate and Foreclosure Help. Joseph Smith has been educating buyers on the finer points of purchase at ForeclosureDeals.com for over ten years. Click here to visit and read m. Joseph Smith's top article generates over 3350000 views. to your Favourites.
Energy Efficient Homes Team has sinced written about articles on various topics from Foreclosure Help. If you are a slave to high-energy costs like Paul and Kim you can free yourself now using the new Do It Yourself Home Energy Audit. It is a complete guide to locating energy wasteful problem areas in your home. The program consists of a visual home inspec. Energy Efficient Homes Team's top article generates over 880 views. to your Favourites.