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Introduction.

With unemployment back up to 10% at the start of this year the so called signs of economic recovery and, therefore, many folk’s personal finances, seem to be emulating the weather at the moment. Paychecks and money are either melting away with the snow or being frozen solid as we dare not touch them, for fear of what might happen to our jobs in the near future. One thing that will surely happen as a result of the unemployment figure going up again is that there will be more foreclosures on mortgages.

Foreclosures can mean investment opportunities.

Not wishing to sound heartless but it’s a fact that “one man’s loss in another man’s gain”; and the same is true when it comes to someone having their mortgage foreclosed. If you have some foresight, why not plan ahead and buy a foreclosed property for less than its true market value? Of course mortgage companies will always offer a re-finance mortgage to try and help avoid the foreclosure, but sometime folk have simply over-stretched themselves in terms of the mortgage they could afford. The net result of this in a time of economic recession is that the property market can be become flooded with properties, ostensibly owned by the mortgage companies carrying out the foreclosure. However, they don’t want to hold on to these properties until the economy heats up again and so auction them off to recoup their money. This is where a foreclosed property can turn into an investment opportunity for someone else.

You could turn a new mortgage into a second home investment.

Buying a property at an auction.

Obviously, if you haven’t got the cash to buy with you’ll need to secure a new mortgage before making a bid. Buying a property at an auction you will get it for tens of thousands of dollars less than if it was worth on the open market. Even better, you can make an offer directly to the vendor ahead of the auction or, even better still, if a property doesn’t sell at an auction you can make them an even lower offer after the auction - which if they’re keen to sell will probably accept. Buying a foreclosed property is one way that you can secure a property for a family member, as a dream second home or simply as an investment for the future.

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