Although the housing market is not as strong as it was a few years ago, there are many people still in the position to buy. Many of these buyers are considering short sales or foreclosures in order to get a good deal. Buying homes in the midst of mortgage trouble may not be a bad idea in general, but there are additional considerations. In general there are some things that should be considered before you buy a home of any status, foreclosure or traditional sale.
In Over Your Head
The most important aspect of buying a home is the mortgage payment. Sure you can afford the mortgage payment now, but what if you or your spouse lost your job or couldn’t work? Most people do not even consider financial hardships when making their decision in purchasing a home. If you want to stay out of mortgage debt, make sure you can afford the mortgage payment on one salary or have enough saved up to carry your mortgage for several months while you look for a solution. Unexpected circumstances such as job loss, sudden illness or disability or loss of spouse, are the number one cause of overwhelming mortgage debt problems.
A Diamond In The Rough
Buyers tend to pay attention to the home itself rather than the neighborhood where it is located. While a home may appear to be located in a good neighborhood, looks can’t tell all. It is important to find out the home values of houses nearby and whether there are any foreclosures within a 5-10 mile radius. Dropping home values may be an indication of things to come for the home you are considering. Even if you are not buying a foreclosure, a traditional sale located near several foreclosures may be an indication of where the neighborhood is headed. The last thing you want to do is buy the nicest house on a block, because you will have a difficult time selling it in the future.