Ever wonder what the difference is between a Tax Foreclosure and a Mortgage Foreclosure?
Lets break it down for a quick sec here…(And no..I don’t mean dancing :))
A few facts about foreclosures:
1. Every state varies its foreclosure rules and regulations, so be sure to check with your state to determine proper ways to go about the specifics.
2. Each state will provide a redemption period for the homeowner to redeem the property. In this time, the owner can pay back the foreclosure costs, interest gained on the property. And in turn they will get their property back.
Be sure to know these things before you start planning out what you are going to do.
In a Tax Foreclosure, the bidder pays for the homeowner’s delinquent property taxes so he can either a) get interest back on his investment or b) get the ability to foreclose on the property should the homeowner not redeem in the allotted redemption period.
With a Mortgage foreclosure, the new owners can very quickly evict the former ones, as fast as the local law allows. (Be sure to check with your state/county to learn the rules/regulations on this!)
One final distinction I want to point out today, is the defence of each foreclosure.
A mortgage foreclosure involves a dispute between the homeowner and the lender. It can defended and resolved outside of the courts if necessary.
In a tax foreclosure, the issues lies between the homeowner and the local county. When a dispute happens for a Tax Foreclosure, it must be settled in the court system, and that can lead to lawyers/fees and whatever else comes up.
Like everything, before you start investing in either ones, do a bit of county research to learn the rules. This WILL save you trouble down the road and keep you on top of your investing game.
Thanks for reading, and stay tuned for more great blog posts 🙂
