In a case like this, potential buyers can get a great deal…even a steal of a deal! When you deal with a short sale you can get a home almost as cheap as with a foreclosure sale without a bidding war and without having to deal with the legalities and red tape involved in a typical mortgage foreclosure. You can find many online sources that list foreclosure and short sale deals. A great benefit of a short sale is a very quick closing, which can be an attractive proposition to the seller and buyer.

If you have found the house that you plan to live in for the rest of your life, you are probably now talking to banks to see about a mortgage. Without good credit, banks are going to have to really evaluate whether or not you would be a good person for such a big loan. Your goal is to improve your chances of getting a mortgage, because without one there is no way that you can get a house. What can you do to improve your chances of getting a mortgage?

Do your research. The very first thing you want to do is to figure out what your financial history is. If you don't know it, you are going to want to get your credit score. This score is going to tell you whether your credit is good or not and is the number that banks look at to determine if you are a high risk or a low risk. If your score is not that great, you may find that it is difficult to find a bank that is willing to lend you the money that you need. On the other hand if your score is great, you will find that banks are fighting for your business and may even offer you special deals to take out your mortgage with them.

Know where your money is going to. When you go in to talk to banks, take a copy of the budget that you drew up that shows exactly how much you are currently spending on renting a house and how much you would pay with your mortgage payment. When banks find out that you are able to afford the mortgage payments they are going to be more likely to approve the application.

Don't forget about your down payment. Most people buying their first home don't have a big enough down payment saved up. Unless you have a perfect credit rating, a lot of banks aren't going to want to take the risks if you don't have enough money to invest in the house. To improve your chances of getting approved, save up at least 20% of the price of the house before applying.

Get someone to back you. If your credit is questionable, a bank may ask you to find a cosigner who will put their mortgage on the line if you don't pay on time. This will definitely help your chances of approval. But, a lot of people will probably not want to risk their houses on your bad credit.

Research the real estate market. You are going to have a better chance of getting a mortgage if you are planning on buying a house in a hot market. If you are going to buy something in a market that is cooling down, you are probably going to find a lot of banks aren't willing to give you a mortgage on a property that is going to decrease in value.

Find out about your neighborhood. Some bank officials are going to ask you about how much houses in the neighborhood sold for in the past. When they find out that you know how much your future neighbor's house sold for three years ago, they are going to be impressed and give you the loan

Getting a mortgage approved is getting more and more difficult everyday with the economic downturn. However, if you follow these six tips you are going to find that getting a loan for your dream house is going to be possible.

Cons of Foreclosure Properties

1. Perhaps the unit isn’t yet vacant. If you’re watching a property that you know will be foreclosed, the part where people are being evicted can get a bit ugly and present delays.

2. The wait time and red tape. Foreclosures have processes that take time and it might be a while waiting for a property you have an eye on to become yours. There can be administrative processes that take time.

3. The condition of the property. Some foreclosure properties can be real fixer uppers because of neglect or financial hardship to the family that previously held the mortgage. It can be difficult to ascertain exactly what repairs might be needed until you actually buy the home unless it has been on the market vacant. Sometimes foreclosure properties sell quickly due to a great deal so there may not be a lot of time available to ascertain potential repair costs.

Despite the cons listed here, the cost savings on a foreclosure home can be significant enough to warrant the extra time, effort and minute amount of red tape involved.

In terms of real estate, this is also called a sheriff’s sale. If you know about sheriff’s sales, you can save a significant amount of money on buying property. Many homes are sold for foreclosures and for unpaid taxes or for a decent price because of bereavement.

Where can you find these sales?

Trustee or sheriff’s sales are often listed: online, in the newspaper and in special reports that people subscribe to in order to find out when these sales are happening. Because buying property or homes in these sales can save a significant amount of money, it can be prudent to subscribe to a paid list that notifies people much earlier than the public is told about these sales.

In many cases, the lender puts in writing that they have the power to foreclose on your mortgage if you miss two payments. While the trend used to be monthly mortgage payments, this isn’t the case any more so if you are making bi-monthly, bi-weekly or weekly payments it’s very important to know precisely how much leeway you have before foreclosure is a reality for you.

Many people sign up with accelerated mortgage payments to save on interest and plan for budgeting purposes so be sure you understand precisely how much time you have before you could be facing foreclosure.

• Lost jobs
• Medical problems
• Mounting credit cards and other debts
• A mortgage that is too high

The above are the top reasons why foreclosures are happening so often. It’s so important that when you plan to buy a home, you do your best to buy within your means. Today, there’s a credit problem in society where people live well above their means and when faced with a financial crisis have no nest egg to fall back on. A mortgage payment can be staggering and if your family is spending more than 25% of your income on your mortgage, you could be in trouble if you face any financial hiccups.

The best advice: Save money! Invest and save money so that you have at least a few months of mortgage payments (preferably 6) put away for a rainy day.

Foreclosures are a scary word to homeowners. Once you have your name on a mortgage, take measures to be sure you can afford that home and that you have a sound financial plan that enables you to keep it.

Are mortgage rescue services legit?

There are many services out there that will legitimately help you with your problems. Some services are available for a fee and some are non-profit services. It’s important that you exercise caution when dealing with a company or organization that offers to help you save your house. Quite often these are companies that want to do a reverse mortgage or equity stripping deal with you. This deal might work in your favor as an alternative to losing your house but can be very expensive so it’s in your best interests to look closely at all the contracts and weigh all the pros and cons of dealing with such a service.

Non-profit companies might also offer to help you through credit counseling services or to help you deal with your lenders effectively. Again, research the organization and take your time reviewing your options. While time may seem that it is of the essence, do your due diligence but carefully weighing all options before signing any contracts.

• Talk to your lender and see if you can have an extension. Work to get the money they need to them. Chances are that they will want to work with you instead of foreclosing

• Have a short sale. Work with a realtor or sell privately with a quick closing and aggressive sales price

• Equity stripping options. Some lenders will let you have the equity in your home and will buy it at a discount. This can be costly but can save you from having to move. You could rent your home from the lender who pays off your mortgage and provides you with an agreed on fee. This is also called a reverse mortgage

• Raise funds quickly through a sale or by borrowing funds

• Talk to HUD, a government agency who can help you find out what your options are

It might not be too late to save your home. It’s important that you research your options and most importantly, act quickly!

1. Communicate early. Don’t wait until your situation is dire to talk to your lender about possibilities for refinancing or payment arrangements otherwise they will put you in default without considering your options.

2. Don’t ignore collection calls. Your lender will be less likely to work with you if you avoid them. Their job is to collect and they don’t want to foreclose if they don’t have to as they’d much rather help you keep your home so it’s profitable for them. Communicate!

3. Keep your promises. Don’t make commitments that you cannot keep. Be up front and honest otherwise your effort spent will mean nothing but a bit of borrowed time until foreclosure is inevitable.

If your house hasn’t been foreclosed, it’s not too late to do something to save it. Look at your options and work with your lenders to find a solution.

Choosing the right lender for your mortgage will ensure that you get a great deal. Deal with reputable lenders or mortgage companies with a positive reputation. If you’re a high-risk borrower, this can mean you might have to pay a higher interest rate. If this is the case, sign a short-term mortgage if possible and do your very best to get in a better situation soon so that banks will be knocking on your door to give you a great rate because they want your business.

Keeping in mind what you could lose is something that can help you make a solid financial decision about buying a house, which is a decision that will impact your life and finances for a long time to come.