Is Foreclosure your only choice?

May 17, 2018 by debbie

When the house goes into foreclosure, this goes on your credit report and stays there for seven year. Unfortunately this means that your credit rating will drop, so that interest rates for credit cards and other loans you may get will be higher.

Finding a Place to Live

• If your house goes into foreclosure, you may find it difficult to find another place to live. Some landlords may consider your foreclosure a sign that you might not pay for your rent as well and may require a larger deposit than usual to cover what they see as a perceived risk.

Future Down Payments

• If you go into foreclosure, you may find that when you apply for another mortgage in the future, you not only will be faced with higher interest rates but you may be required to put a larger percentage down as a down payment.

No New Mortgage for Several Years

• You cannot apply for another mortgage for three years after your house is foreclosed upon; Fannie Mae can require a waiting period of up to seven years for their mortgages, depending on your circumstances.

Getting a Job

• A foreclosure should not affect you when you apply for most jobs, unless the employer expects you to deal with money. Since your employer will want to know why your house went into foreclosure, you should be ready with an answer. Providing information about how the foreclosure has changed your personal money management can help.

Taxes

• Unless you file for bankruptcy, you may be responsible for the taxes on the house that was foreclosed upon.

Foreclosed homes are usually in some form of disrepair. If the owners could not make their mortgage payments, it is likely that they could not afford to keep up with maintenance either. You may have to spend a lot of money to make the home livable, so factor in the cost of repairs when considering the purchase price.

Foreclosures often come with encumbrances such as judgments, liens and other attachments that you may have to pay to obtain the property. It is wise to conduct a title search or hire a title search company to research the property so you can make an informed decision prior to purchasing.

Homeowners-Is a Short Sale my best option?

May 17, 2018 by debbie

Short Sale Pros and Cons

It is happening all too often in today’s market. Your home is not what is worth last year, or even a few months ago. Professionals are now calling it an “upside-down house” in which you owe more on the mortgage than the house is now worth. If you cannot ride out ride out the financial storm, then you may want to consider a short sale to avoid a foreclosure situation.

A short sale is when the house or property is sold for less than the balance due on the mortgage. The lender takes the loss, but not as much as a foreclosure process. A short sale is not always the best option for everyone.

If you are thinking of doing a short sale on your home, here are some pros and cons to consider:

Pros

No Foreclosure – Foreclosures can be a very hard and stressful process for a family. It can take anywhere from six to twelve months for a foreclosure to complete.
Being proactive – Facing foreclosure head on will help give you some control over the process. By choosing a short sale, finding a buyer and negotiating terms with the bank, the huge effect on your credit score by a foreclosure can be dodged.
Start Newer, Faster – Minimizing damage to your credit score can help you and your family get back on your feet faster. You’ll be eligible to purchase another house faster than if you entered foreclosure.
May not owe anything after the Short Sale – You can try asking the bank to cancel your debt altogether. It does happen, but not all the time.
You no longer need to pay large monthly mortgage payments
The lender may forgive the difference in debt between what you owe and the final price.
Your credit score will usually recover more quickly than a foreclosure
You can re-qualify for a new mortgage loan more quickly than a foreclosure
You are more likely to escape bankruptcy
If you are not able to pay the mortgage premium, or work with the lender on getting a lower monthly payment, a short sale is the best case scenario…even though it means losing your home and investment.

Cons

There is still damage to your credit – When a short sale is done on your home, it is still documented on your credit but won’t have the same impact as a foreclosure for most creditors. Although lenders will view a short sale somewhat similar to a foreclosure. The chances of getting a home loan will be slim during the ‘wait period’.
Tax Consequences – there may be tax consequences if the bank forgives the debt and will issue a 1099 for the amount of debt forgiven. This form is sent to the IRS to allow the bank to write off the loss. The IRS treats the forgiven debt as a taxable income which means you will need to pay taxes on the amount owed. Although due to the Mortgage Forgiveness Debt Relief Act of 2007, no taxes are owed on the forgiven debt.
Bank Could Demand Payment for their Loss – The bank doesn’t have to forgive the debt. They are able to ask you pay them back for the difference on the sale and what is owed, but you’ll need to agree to this.
The lender does not have to say yes to a short sale.
You must show proof that you cannot make your mortgage payments and the proof must be reasonable. The lender will not approve a short sale if you gambled your savings. A few hardships accepted are such things like illness, divorce, or a job loss.
The lender will make sure you do not have any recourse, savings or other assets to pay off the rest of the debt.
A short sale is not short. It is a long process and it depends on how quickly you put together the right papers, how it is provided and how quickly the lender reacts. There are many people in this situation, creating a backlog in the process.
Lenders are notorious for not communicating quickly to approve short sales.
If your home has liens, 2nd mortgages, or a home equity line of credit, each lender has be consulted for approval, which can take up a considerable amount of time.
Once the lender approves the short sale, the successful transaction depends on a good offer from a good buyer.
The lender may require you to sign a promissory note for the debt forgiveness in order to approve the short sale.
The lender may pursue a repayment of the debt forgiven after the short sale is completed.
Your credit score is going to take a hard hit as it would if it went through a foreclosure. Consult tax and legal advice.
You could be taxed on the debt forgiveness if the property sells for more than 2 million or is not your primary residence. Consult a tax professional.

There are no guarantees in a short sale whether the bank will approve the bank or even forgive your debt, but Short Sales offer a better alternative to minimize the downside of facing a foreclosure.

A short sale is a difficult process for both the seller and buyers. There are so many details involved (more than what the average homeowner is aware of). Make sure to consult professionals.

Buyers – Should I Buy a Short Sale?

May 17, 2018 by debbie

A short sale is when the house or property is sold for less than the balance due on the mortgage. The lender takes the loss, but not as much as a foreclosure process.

Short Sale homes are usually in some form of disrepair. If the owners could not make their mortgage payments, it is likely that they could not afford to keep up with maintenance either. You may have to spend a lot of money to make the home livable, so factor in the cost of repairs when considering the purchase price.

• A short sale is not short. It is a long process and it depends on how quickly the seller puts together the right papers, how it is provided and how quickly the lender reacts. There are many people in this situation, creating a backlog in the process.

• Lenders are notorious for not communicating quickly to approve short sales.

• If the home has liens, 2nd mortgages, or a home equity line of credit, each lender has be consulted for approval, which can take up a considerable amount of time.

There are no guarantees in a short sale whether the bank will approve the offer.

A short sale is a difficult process for both the seller and buyers. There are so many details involved (more than what the average homeowner is aware of). Make sure to consult professionals.

Buying Your First Home? Real Estate Agents Are Your Professional Guides.

May 17, 2018 by debbie

You might be a bit afraid or intimidated by the whole process of buying your first home. As a Delaware, Maryland, and Pennsylvania real estate expert, I can guide you through the transaction, from beginning to end.

I will take the time to go through each and every step of the buying process. There are no dumb questions!

Together, we will consider:

– Is renting or buying better for you?

– The tax advantages of buying.

– What is your time frame for moving?

– How much can you really afford?

– How to qualify for a mortgage.

– How to buy a home with little or nothing down.

– What it takes to get approved for financing. What banks and other financial institutions are looking for.

New to the home buying process? Tell me your concerns. Ask me questions. There’s no obligation, and I promise to get back to you quickly…

Understanding the buyer

May 17, 2018 by debbie

As the seller, you can control three factors that will affect the sale of your home:

* The home’s condition
* Asking price
* Marketing strategy

However, it’s important to note that there are numerous other factors that influence a buyer, and you need to understand these consumer trends when you enter the sellers’ market. The more your home matches these qualifications, the more competitive it will be in the marketplace. Your real estate agent can advise you on how to best position and market your home to overcome any perceived downsides.

Location
Unfortunately, the most influential factor in determining your home’s appeal to buyers is something you can’t control: its location. According to the National Association of REALTORS(r), neighborhood quality is the No. 1 reason buyers choose certain homes. The second most influential factor is commute times to work and school.

Size
While some buyers want to simplify their lives and downsize to a smaller home, home sizes in general have continued to increase over the decades, nearly doubling in size since the 1950s. Smaller homes typically appeal to first-time home buyers and “empty nesters,” or couples whose children have grown up and moved out.

Amenities
Preferences in floor plans and amenities go in and out of fashion, and your real estate agent can inform you of the “hot ticket” items that are selling homes in your market. If your home lacks certain features, you can renovate to increase its appeal, but be forewarned: That’s not always the right move. Using market conditions and activity in your neighborhood as a gauge, your agent can help you determine whether the investment is likely to help or hinder your profit margin and time on the market.