Considering Las Vegas Foreclosures?
If you are thinking about Las Vegas, NV real estate
, you will need to become familiar with one key word - foreclosure.
A foreclosure is a home where the previous owner took out a loan, in the form of a mortgage, from a bank to either buy the home, refinance the home, or to gain access to the equity that had built up in the home. Then the homeowner failed to make the monthly payments on the mortgage for several months at a minimum. The bank that held the mortgage, which may or may not be the bank that originally lent the money, then gained ownership of the home through foreclosure.
The home is sold by the bank because the bank is not in the business of owning homes. They want to get their money back they lent the previous owner so they can turn around and loan that money back out.
Many Las Vegas foreclosures are due to three issues. First, the home owner no longer makes the same amount of money as they did when they bought the house and can not afford to make the monthly payments.
Second, many people got loans they never could afford, due to the creation of exotic loans. These loans allowed people to get a loan without proving their income, or to get introductory rates on payments for the first couple of years of the mortgage. At some point the monthly payment increased beyond what the home owner could afford to pay.
Finally, the mortgage had a higher balance than the house was worth and the owner decided to stop making monthly mortgage payments. Called a strategic default, this option has become common and can be the best decision for the home owner to make, even though lenders are trying to make it seem as if there is something morally wrong with doing so.
Foreclosures are expected to be relevant in Las Vegas real estate for some time to come, and can represent a great opportunity for the first time home buyer.
by: Alfred Wendler
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