The available inventory and pricing of bank foreclosure is influenced by the real estate market conditions. The foreclosure market is impacted by changes in interest rates, as sudden fluctuations affect whether people are able to continue to afford their monthly mortgage payments. Rising interest rates can also affect potential buyers. As interest rates increase, you may not be able to afford to purchase the home you envisioned due to higher mortgage rates. Instead, consider other affordable home options such as bank foreclosures. Bank foreclosures can offer an alternative to a regular home purchase and they can help you find a good deal on a Calgary home amidst a difficult time for home buyers.
Bank Foreclosures And Interest Rates
What Is A Bank Foreclosure?
When a person repeatedly misses their loan payments, negotiations with the lender haven’t been successful, and the homeowner doesn’t prove they have the ability to repay the home loan, a home is foreclosed upon and repossessed. The foreclosed property then belongs to the bank, which tries to sell the home to recoup its losses. Bank foreclosures are not as common in Canada as they are in the US, but with the recent increase in Canadian interest rates, more homes are foreclosing as owners with variable mortgage rates can’t make their payments. This, combined with the expected further increase in interest rates, is leading to more inventory of bank foreclosures on the market. For information about bank foreclosures and what to expect, read What Should You Know About Foreclosures?
Why Can Bank Foreclosures Be Beneficial When Interest Rates Are High?
Some people explore the option of purchasing bank foreclosures because they can be more affordable than other homes. A lower purchasing price already helps to reduce the monthly payment amount, and this means less money to paid in interest over the term of your mortgage. Sellers of pre-foreclosures or bank foreclosures typically want to sell the property quickly and may offer incentives to make the deal more appealing. This can include a lower selling price or a decreased down payment. Of course the best way to avoid the impact of rising interest rates is to make a cash offer and avoid a mortgage altogether. Banks also look more favourably on cash offers when selling a bank foreclosure.
Purchasing Bank Foreclosures In Calgary
As interest rates rise, some home buyers will struggle to find affordable home prices, making bank foreclosures an appealing option. But purchasing a bank foreclosure can be difficult to navigate even for some Realtors®. Get a good foreclosure deal and feel confident in your decision and contract by partnering with a Calgary Realtor® who is highly experienced in bank foreclosures. The Mel Star team has helped Calgarians purchase thousands of bank foreclosures and is the leading foreclosure Realtor® team in Calgary. The Mel Star team has over 40 years of experience with fluctuating interest rates in the Calgary real estate market and knows how to handle shifting markets and complicated bank foreclosure contracts. To partner with knowledgeable and reputable Calgary Realtors® who know the intricacies of Calgary bank foreclosures, speak with the Mel Star team at 1-403-861-9944 or fill out the online contact form.
FAQ
Yes, you can. However, banks may find all-cash offers more attractive.
A pre-foreclosure home has not yet been foreclosed, but it is going to be. If you are purchasing a pre-foreclosure home, you will be buying it from the homeowner instead of from the bank. These properties can often be very affordable, as the seller has a short time frame to sell the house. Ask one of our Calgary Realtors® about the different options of bank foreclosures versus pre-foreclosure homes for more information and the pros and cons of each.
When it comes to buying a foreclosure, there is no special training for Realtors®. Because of this, it is extremely important to have a Realtor® with extensive experience and the knowledge to increase your chances of obtaining a great deal as well as looking after your best interests.
CONTACT US
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