Home auctions and pre-arranged finance, marriage in heaven

Home auctions and pre-arranged finance, marriage in heaven.

Winston Churchill was once quoted as saying: “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.” That has never been as true as in an economic depression. While the masses fall into unemployment, financial strife and in many cases hunger and death a few can take advantage of the miseries of the many for financial improvement. That of course would be the communist view of things. A version you might be more comfortable with would be: Those that were not stupid and did not invest irresponsibly can now invest wisely from the losses of the  greedy that did not live within their means. Both are probably as wrong and unfair as each other. What is true is that in economic crisis, depressions, slumps or whatever you want to call them, there are opportunities to be taken for those that have the resources or access to them.

Clear representatives of these opportunities are home auctions. The Real Estate boom that preceded the current depression caused, encouraged or duped, take your pick, many into buying way over their budget. Now they can’t even afford the interest of the mortgage and the market value of the house is often half what it used to be. The only option these people have is to sell, short sell or foreclose the mortgage. Whatever the option the outcome is often a house auction. House auctions are not only for second hand homes, they are also used when house constructors have too many home is stock and sell a whole bunch of them at a discount price. Whatever the case, buying at a home auction can be a great opportunity if you have the cash for it. Or even better, if you have access to the cheap money banks are now willing to sell you.

With interest rates at record lows it can look silly to use hard cash when credit is so cheap. For instance you can now get a 30 year fixed interest rate for around 4.5 %. A fixed interest rate!  That is an amazing price for a fixed rate, that represents the most expensive rate of interest. You can get much better deals if you are willing to go with a variable interest rate. Variable interest rates change with the going rate set by the government of financial authority responsible for it.

So here is the chance we have hinted at. If you have cash, or even better a good credit record and score, you can get a pre-arranged line of credit. Once you have this line of credit you can go to a house auction and bid with confidence that you have the means to cover your bid. With some auctions you must prove finance before bidding. Having the right finance arranged will allow you to bid in more exclusive auctions which often translate to better opportunities.

So take the chance, if your circumstances allow it, you can buy cheap with cheap credit.