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The Department of Veterans’ Affairs, like any other lender, extends mortgages to homebuyers on the basis that repayments will be made on time until the mortgage is fully serviced. However, borrowers of VA default on their payment for different reasons, which forces VA to act for recovery. The VA acts through the process of government foreclosures to get back their funds from defaulting borrowers.
You don’t have to be a veteran to buy a property that is a VA foreclosure. The VA is very often quite keen to sell its foreclosure properties so that they don’t have to pay the upkeep necessary to maintain it. Therefore, they quite often offer favorable financing and interest rates to prospective buyers.
When searching for a home in a lower price bracket, government foreclosures are ideal. Since the former owner was unable to make their mortgage it is likely that the property was not properly maintained making it a good investment for the savvy investor. Often times it is the more run down and unsightly properties you can pick up for cheap, fix up and make a good return on.
There are cheap government foreclosures to be found that can be purchased quite cheaply. Few people are interested in these properties so there is not much competition. You need to have them inspected to find out if they have major structural problems. The properties with these types of problems you need to stay away from due to repair costs. Properties that can be easily fixed such as a new bathroom is needed or it has a basement that floods are the ones to buy.
A VA foreclosure is typically perfect for real estate investment and those wanting to purchase a home at less than its market value. To find foreclosure properties, you can visit a realtor as most VA foreclosures are listed on the local Multiple Listing Service by local real estate agents. You could also perform an internet search on “VA foreclosure properties” and the zip of your target area.
There are other types of government foreclosures besides VA foreclosures. Likewise bank foreclosures on bank owned real estate, preforeclosures and foreclosure auctions offer other similar opportunities outside of government foreclosures for bargains when real estate investment.
Borrowers of VA default on repayments and recovery is made by VA foreclosures to avoid further loss/maintenance. They offer favorable financing/interest rate to prospective buyers. Such foreclosures are ideal for real estate investing since it is a run-down property and can often be bought cheaply. One should stay away from properties having structural problems whose repair cost is high. Properties requiring bathroom fixing or basement that floods are the ones to buy. VA foreclosure homes can be obtained either from Multiple Listing Service of realtors or doing an Internet search. To get best bargain one should consider other government foreclosures such as bank foreclosures/bank owned real estate etc.
- David E. Williams
