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Q-A Series – FIRST STEPS

Q. WHAT STEPS NEED TO BE TAKEN TO SECURE A LOAN

The first step in securing a loan is to complete a loan application. To do so, you’ll need the following information.
– Pay stubs for the past 2-3 months
– W-2 forms for the past 2 years
– Information on long-term debts
– Recent bank statements
– tax returns for the past 2 years
– Proof of any other income
– Address and description of the property you wish to buy
– Sales contract

During the application process, the lender will order a report on your credit history and a professional appraisal of the property you want to purchase. The application process typically takes between 1-6 weeks.

Q. HOW DO I CHOOSE THE RIGHT LENDER FOR ME

Choose your lender carefully. Look for financial stability and a reputation for customer satisfaction. Be sure to choose a company that gives helpful advice and that makes you feel comfortable. A lender that has the authority to approve and process your loan locally is preferable, since it will be easier for you to monitor the status of your application and ask questions. Plus, it’s beneficial when the lender knows home values and conditions in the local area. Do research and ask family, friends, and your real estate agent for recommendations.

Q. HOW ARE PRE-QUALIFYING AND PRE-APPROVAL DIFFERENT

Pre-qualification is an informal way to see how much you maybe able to borrow. You can be ‘pre-qualified’ over the phone with no paperwork by telling a lender your income, your long-term debts, and how large a down payment you can afford. Without any obligation, this helps you arrive at a ballpark figure of the amount you may have available to spend on a house.

Pre-approval is a lender’s actual commitment to lend to you. It involves assembling the financial records mentioned in Question 47 (Without the property description and sales contract) and going through a preliminary approval process. Pre-approval gives you a definite idea of what you can afford and shows sellers that you are serious about buying.

Q. HOW CAN I FIND OUT INFORMATION ABOUT MY CREDIT HISTORY

There are three major credit reporting companies: Equifax, Experian, and Trans Union. Obtaining your credit report is as easy as calling and requesting one. Once you receive the report, it’s important to verify its accuracy. Double check the “high credit limit,”‘total loan,” and ‘past due” columns. It’s a good idea to get copies from all three companies to assure there are no mistakes since any of the three could be providing a report to your lender. Fees, ranging from $5-$20, are usually charged to issue credit reports but some states permit citizens to acquire a free one. Contact the reporting companies at the numbers listed for more information.

CREDIT REPORTING COMPANIES
Company Name Phone Number
Experian 1-888-397-3742
Equifax 1-800-685-1111
Trans Union 1-800-916-8800

Q. WHAT IF I FIND A MISTAKE IN MY CREDIT HISTORY

Simple mistakes are easily corrected by writing to the reporting company, pointing out the error, and providing proof of the mistake. You can also request to have your own comments added to explain problems. For example, if you made a payment late due to illness, explain that for the record. Lenders are usually understanding about legitimate problems.

Q. WHAT IS A CREDIT BUREAU SCORE AND HOW DO LENDERS USE THEM

A credit bureau score is a number, based upon your credit history, that represents the possibility that you will be unable to repay a loan. Lenders use it to determine your ability to qualify for a mortgage loan. The better the score, the better your chances are of getting a loan. Ask your lender for details.

Q. HOW CAN I IMPROVE MY SCORE

There are no easy ways to improve your credit score, but you can work to keep it acceptable by maintaining a good credit history. This means paying your bills on time and not overextending yourself by buying more than you can afford.

What if They Accept the Offer?

Congratulations, your offer has been accepted!

Over the next 30 to 60 days, your purchase will be pending and you will begin the escrow process. Typically, an offer will have several contingencies. Contingencies are terms and conditions written into a contract by the buyer or the seller, which must be met within specified timelines in order for the sale to be completed. Know this, contingencies are a homebuyer s best friend. When contingencies are not met, the sale is cancelled and your deposit money may be refunded.

Some common contingencies include proper financing being in place and conducting a home inspection. Without proper financing in place, you ll have a tough time paying for your new house! In addition, conducting a home inspection can re-open negotiations to pay for hidden problems the house may have  or terminate the sale entirely if truly serious problems are found.

There are many other contingencies that can be attached to the sale of a particular piece of property depending on the different needs of buyers and sellers. Again, a good real estate agent will suggest the contingencies that you should make as part of the offer.

During the sale pending period, you will also be provided with a number of disclosures relative to the sale of your new home. These disclosures run the gamut from information about the business relationships between your real estate agent and your lender, to natural hazards that may exist in and around your new home.

Two of the most important disclosures you will receive include:
Real Property Transfer Disclosure Statement This disclosure is completed by the seller. It tells you the physical condition of the property and potential hazards or defects that may be associated with it. While the seller is principally responsible for the disclosures presented in this document, the agent is also responsible for conducting a visual inspection of the property and disclosing any readily observable defects detected in the process. This document also discloses any special taxes, assessments and other factors that may have a material effect on the value or desirability of the property.

Agency Relationship Disclosure Your real estate agent is required to provide you with a written disclosure stating whom he or she represents in the transaction. The agent may represent you as the buyer exclusively, or the seller exclusively, or be a dual agent representing both you and the seller. You should carefully review and understand this disclosure as it has a material effect on the level of responsibilities that your agent owes to you.

Attaching excessive contingencies to an offer or sale in a hot real estate market can easily kill a deal. There may be several other buyers waiting in line with a shorter list of needs.

Home Buyer Hint
Depending on the location, age and other factors involved with the residential property that you are purchasing, additional disclosures may be required. If you have questions about disclosures, ask your real estate agent.

8 Reasons Why You Should Work With a REALTOR

Not all real estate practitioners are REALTORS . The term REALTOR is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS and subscribes to its strict Code of Ethics. Here are five reasons why it pays to work with a REALTOR .

1. Navigate a complicated process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multipage settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.

2. Information and opinions. REALTORS can provide local community information on utilities, zoning, schools, and more. They ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment Second, will the property have resale value when I am ready to sell

3. Help finding the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your REALTOR to find all available properties.

4. Negotiating skills. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. Property marketing power. Real estate doesn t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner s contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a REALTOR , you do not have to allow strangers into your home. Your REALTOR will generally prescreen and accompany qualified prospects through your property.

6. Someone who speaks the language. If you don t know a CMA from a PUD, you can understand why it s important to work with a professional who is immersed in the industry and knows the real estate language.

7. Experience. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. Even if you have done it before, laws and regulations change. REALTORS , on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.

8. Objective voice. A home often symbolizes family, rest, and security  it s not just four walls and a roof. Because of this, homebuying and selling can be an emotional undertaking. And for most people, a home is the biggest purchase they ll every make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues most important to you.

Reprinted from REALTOR magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS .
Copyright 2008. All rights reserved.

What is Escrow Anyway

Once an offer has been accepted by a seller and both parties have signed all of the pertinent dotted lines on the offer this document becomes the sales contract (or agreement). Next, the contract and all necessary paperwork and/or funds are collected and delivered to a neutral third party called an escrow holder.

During the escrow process, this neutral third party will carry out the provisions of the agreement between buyer and seller. An escrow holder is typically an escrow firm or title company. As with the other parts of your transaction, a good real estate agent can help you find an escrow holder in your area. Check the fees charged by the various escrow holders in the area. These fees may be negotiable.

The escrow officer carries out instructions from the buyer and seller, and ensures that ownership of the property is transferred from the seller to the buyer.

The escrow officer will also collect all of the odds and ends in the purchase process.

This includes proof of insurance, the preliminary title report, inspection reports, loan information and the like. The escrow officer will also prepare the final closing statement. The final closing statement is much like a bank statement, in that it lists all of the credits and debits associated with the purchase of the home. Compare the closing costs to those listed on the Good Faith Estimate received from your broker/lender.

You will typically meet with the escrow officer to sign a lot of documents. READ EVERYTHING! Take your time and ask questions about things you don t understand.

Hints on Closing

  • Keep in close communication with your lender. Are there any problems with documentation on the loan Has everything been verified
  • Keep in close communication with your real estate agent. Are there any problems with the home inspection Pest report
  • Always be available for any questions from your real estate agent, escrow officer, loan officer, or anyone else involved in the buying process. Make sure you re  in the loop with any issues that may arise.
  • When it comes time to close escrow — that is, take possession of the house — clear some time. Figure out WHEN you d like to close, and then look at when you HAVE TO close. Are you moving at the end of the month from a rental to your new place Don t let delays leave you out in the street!

Ask your escrow officer for an estimate of closing costs. You won t know exactly how much you ll pay until escrow closes, but it is good to know these figures ahead of time.

10 Questions to Ask Your Lender

1. What are the most popular mortgages you offer Why are they so popular
2. Which type of mortgage plan do you think would be best for me Why
3. Are your rates, terms, fees, and closing costs negotiable
4. Will I have to buy private mortgage insurance If so, how much will it cost, and how long will it be required (NOTE: Private mortgage insurance is usually required if your down payment is less than 20 percent. However, most lenders will let you discontinue PMI when you ve acquired a certain amount of equity by paying down the loan.)
5. Who will service the loan  your bank or another company
6. What escrow requirements do you have
7. How long will this loan be in a lock-in period (in other words, the time that the quoted interest rate will be honored) Will I be able to obtain a lower rate if it drops during this period
8. How long will the loan approval process take
9. How long will it take to close the loan
10. Are there any charges or penalties for prepaying the loan

Used with permission from Real Estate Checklists & Systems, www.realestatechecklists.com.

Reprinted from REALTOR magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS .
Copyright 2008. All rights reserved.

Is It an Offer They Can t Refuse

So you ve gotten pre-approved on your loan and you ve decided on what type of home you want to buy. And, you ve found your dream home. Now it s time to make an offer on it. This is when the real fun begins.

To make a good offer on a house, look at its fair market value. To get its fair market value, there are two things you can do: get a comparable market analysis (CMA) or have a professional appraisal done.

The CMA is typically done by your real estate agent. Again, this is a good time to have a great, knowledgeable agent. A CMA is a process of looking at comparable sales in your prospective neighborhood. By examining things like size, location and purchase price, a good agent should be able to give a fairly accurate determination of a home s fair market value.

On the other hand, you can choose to have a professional appraisal done on your prospective home. An appraiser estimates the value of the home and will give you an estimated fair market value. However, you will have to pay to have an appraisal done  whether you get the property or not.

10 Questions to Ask the Condoboard

Before you buy, contact the condo board with the following questions. In the process, you ll learn how responsive  and organized  its members are. You ll also be alerted to potential problems with the property.

1. What percentage of units is owner-occupied What percentage is tenant-occupied Generally, the higher the percentage of owner-occupied units, the more marketable the units will be at resale.

2. What covenants, bylaws, and restrictions govern the property What grandfather clauses are in place You may find, for instance, that those who buy a property after a certain date can t rent out their units, but buyers who bought earlier can. Ask for a copy of the bylaws to determine if you can live within them. And have an attorney review property docs, including the master deed, for you.

3. How much does the association keep in reserve Plus, find out how that money is being invested.

4. Are association assessments keeping pace with the annual rate of inflation Smart boards raise assessments a certain percentage each year to build reserves to fund future repairs. To determine if the assessment is reasonable, compare the rate to others in the area.

5. What does and doesn t the assessment cover Does the assessment include common-area maintenance, recreational facilities, trash collection, and snow removal

6. What special assessments have been mandated in the past five years How much was each owner responsible for Some special assessments are unavoidable. But repeated, expensive assessments could be a red flag about the condition of the building or the board s fiscal policy.

7. How much turnover occurs in the building This will tell you if residents are generally happy with the building. According to research by the NATIONAL ASSOCIATION OF REALTORS , owners of condos in two-to-four unit buildings stay for a median of five years, and owners of condos in a building with five or more units stay for a median of four years.

8. Is the condo building in litigation This is never a good sign. If the builders or home owners are involved in a lawsuit, reserves can be depleted quickly.

9. Is the developer reputable Find out what other projects the developer has built and visit one if you can. Ask residents about their perceptions. Request an engineer s report for developments that have been reconverted from other uses to determine what shape the building is in. If the roof, windows, and bricks aren t in good repair, they become your problem once you buy.

10. Are multiple associations involved in the property In very large developments, umbrella associations, as well as the smaller association into which you re buying, may require separate assessments.

Reprinted from REALTOR magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS .
Copyright 2008. All rights reserved.

Q-A Series – HUD and FHA

Q. WHAT IS THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Also known as HUD, the U.S. Department of Housing and Urban Development was established in 1965 to develop national policies and programs to address housing needs in the U.S. One of HUD’s primary missions is to create a suitable living environment for all Americans by developing and improving the country’s communities and enforcing fair housing laws

Q. HOW DOES HUD HELP HOMEBUYERS AND HOMEOWNERS

HUD helps people by administering a variety of programs that develop and support affordable housing. Specifically, HUD plays a large role in homeownership by making loans available for lower- and moderate-income families through its FHA mortgage insurance program and its HUD Homes program. HUD owns homes in many communities throughout the U.S. and offers them for sale at attractive prices and economical terms. HUD also seeks to protect consumers through education, Fair Housing Laws, and housing rehabilitation initiatives.

Q. WHAT IS THE FHA

Now an agency within HUD, the Federal Housing Administration was established in 1934 to advance opportunities for Americans to own homes. By providing private lenders with mortgage insurance, the FHA gives them the security they need to lend to first-time buyers who might not be able to qualify for conventional loans. The FHA has helped more than 26 million Americans buy a home.

Q. HOW CAN THE FHA ASSIST ME IN BUYING A HOME

The FHA works to make homeownership a possibility for more Americans. With the FHA, you don’t need perfect credit or a high-paying job to qualify for a loan. The FHA also makes loans more accessible by requiring smaller down payments than conventional loans. In fact, an FHA down payment could be as little as a few months rent. And your monthly payments may not be much more than rent.

Q. HOW IS THE FHA FUNDED

Lender claims paid by the FHA mortgage insurance program are drawn from the Mutual Mortgage Insurance fund. This fund is made up of premiums paid by FHA-insured loan borrowers. No tax dollars are used to fund the program.

Q. WHO CAN QUALIFY FOR FHA LOANS

anyone who meets the credit requirements, can afford the mortgage payments and cash investment, and who plans to use the mortgaged property as a primary residence may apply for an FHA-insured loan.

Q. WHAT IS THE FHA LOAN LIMIT

FHA loan limits vary throughout the country, from $115,200 in low-cost areas to $208,800 in high-cost areas. The loan maximums for multi-unit homes are higher than those for single units and also vary by area.

Because these maximums are linked to the conforming loan limit and average area home prices, FHA loan limits are periodically subject to change. Ask your lender for details and confirmation of current limits.

Q. WHAT ARE THE STEPS INVOLVED IN THE FHA LOAN PROCESS

With the exception of a few additional forms, the FHA loan application process is similar to that of a conventional loan (see Question 47). With new automation measures, FHA loans may be originated more quickly than before. And, if you don’t prefer a face-to-face meeting, you can apply for an FHA loan via mail, telephone, the Internet, or video conference.

Q. HOW MUCH INCOME DO I NEED TO HAVE TO QUALIFY FOR AN FHA LOAN

There is no minimum income requirement. But you must prove steady income for at least three years, and demonstrate that you’ve consistently paid your bills on time.

Q. WHAT QUALIFIES AS AN INCOME SOURCE FOR THE FHA

Seasonal pay, child support, retirement pension payments, unemployment compensation, VA benefits, military pay, Social Security income, alimony, and rent paid by family all qualify as income sources. Part-time pay, overtime, and bonus pay also count as long as they are steady. Special savings plans-such as those set up by a church or community association – qualify, too. Income type is not as important as income steadiness with the FHA.

Q. CAN I CARRY DEBT AND STILL QUALIFY FOR FHA LOANS

Yes. Short-term debt doesn’t count as long as it can be paid off within 10 months. And some regular expenses, like child care costs, are not considered debt. Talk to your lender or real estate agent about meeting the FHA debt-to-income ratio.

Q. WHAT IS THE DEBT-TO-INCOME RATIO FOR FHA LOANS

The FHA allows you to use 29% of your income towards housing costs and 41% towards housing expenses and other long-term debt. With a conventional loan, this qualifying ratio allows only 28% toward housing and 36% towards housing and other debt

Q. CAN I EXCEED THIS RATIO

You may qualify to exceed if you have:
– a large down payment
– a demonstrated ability to pay more toward your housing expenses
– substantial cash reserves
– net worth enough to repay the mortgage regardless of income
– evidence of acceptable credit history or limited credit use
– less-than-maximum mortgage terms
– funds provided by an organization
– a decrease in monthly housing expenses

Q. HOW LARGE A DOWN PAYMENT DO I NEED WITH AN FHA LOAN

You must have a down payment of at least 3% of the purchase price of the home. Most affordable loan programs offered by private lenders require between a 3%-5% down payment, with a minimum of 3% coming directly from the borrower’s own funds.

Q. WHAT CAN I USE TO PAY THE DOWN PAYMENT AND CLOSING COSTS OF AN FHA LOAN

Besides your own funds, you may use cash gifts or money from a private savings club. If you can do certain repairs and improvements yourself, your labor may be used as part of a down 8 payment (called -sweat equity”). If you are doing a lease purchase, paying extra rent to the seller may also be considered the same as accumulating cash.

Q. HOW DOES MY CREDIT HISTORY IMPACT MY ABILITY TO QUALIFY

The FHA is generally more flexible than conventional lenders in its qualifying guidelines. In fact, the FHA allows you to re-establish credit if:
– two years have passed since a bankruptcy has been discharged
– all judgments have been paid
– any outstanding tax liens have been satisfied or appropriate arrangements have been made to establish a repayment plan with the IRS or state Department of Revenue
– three years have passed since a foreclosure or a deed-in-lieu has been resolved

Q. CAN I QUALIFY FOR AN FHA LOAN WITHOUT A CREDIT HISTORY

Yes. If you prefer to pay debts in cash or are too young to have established credit, there are other ways to prove your eligibility. Talk to your lender for details.

Q. WHAT TYPES OF CLOSING COSTS ARE ASSOCIATED WITH FHA-INSURED LOANS

Except for the addition of an FHA mortgage insurance premium, FHA closing costs are similar to those of a conventional loan outlined in Question 63. The FHA requires a single, upfront mortgage insurance premium equal to 2.25% of the mortgage to be paid at closing (or 1.75% if you complete the HELP program- see Question 91). This initial premium may be partially refunded if the loan is paid in full during the first seven years of the loan term. After closing, you will then be responsible for an annual premium – paid monthly – if your mortgage is over 15 years or if you have a 15-year loan with an LTV greater than 90%.

Q. CAN I ROLL CLOSING COSTS INTO my FHA LOAN

No. Though you can’t roll closing costs into your FHA loan, you may be able to use the amount you pay for them to help satisfy the down payment requirement. Ask your lender for details.

Q. ARE FHA LOANS ASSUMABLE

Yes. You can assume an existing FHA-insured loan, or, if you are the one deciding to sell, allow a buyer to assume yours. Assuming a loan can be very beneficial, since the process is streamlined and less expensive compared to that for a new loan. Also, assuming a loan can often result in a lower interest rate. The application process consists basically of a credit check and no property appraisal is required. And you must demonstrate that you have enough income to support the mortgage loan. In this way, qualifying to assume a loan is similar to the qualification requirements for a new one.

Q. WHAT SHOULD I DO IF I CAN’T MAKE A PAYMENT ON LOAN

Call or, write to your lender as soon as possible. Clearly explain the situation and be prepared to provide him or her with financial information.

Q. ARE THERE ANY OPTIONS IF I FALL BEHIND ON MY LOAN PAYMENTS

Yes. Talk to your lender or a HUD-approved counseling agency for details. Listed below are a few options that may help you get back on track.

For FHA loans:
– Keep living in your home to qualify for assistance.
– Contact a HUD-approved housing counseling agency (1-800-569-4287 or TDD: 1-800-483-2209) and cooperate with the counselor/lender trying to help you.
– HUD has a number of special loss mitigation programs available to help you:
– Special Forbearance: Your lender will arrange for a revised repayment plan which may Include temporary reduction or suspension of payments; you can qualify by having an Involuntary reduction in your Income or Increase In living expenses.
– Mortgage Modification: Allows refinance debt and/or extend the term of the your mortgage loan which may reduce your monthly payments; you can qualify if you have recovered from financial problems, but net Income Is less than before.
– Partial Claim: Your lender maybe able to help you obtain an interest-free loan from HUD to bring your mortgage current.
– Pre-foreclosure Sale: Allows you to sell your property and pay off your mortgage loan ,to avoid foreclosure.
– Deed-in lieu of Foreclosure: Lets you voluntarily “give back” your property to the lender; it won’t save your house but will help you avoid the costs, time, and effort of the foreclosure process.
– If you are having difficulty with an-uncooperative lender or feel your loan servicer is not providing you with the most effective loss mitigation options, call the FHA Loss Mitigation Center at 1-888-297-8685 for additional help.

For Conventional Loans:

Talk to your lender about specific loss mitigation options. Work directly with him or her to request a “workout packet.” A secondary lender, like Fannie Mae or Freddie Mac, may have purchased your loan. Your lender can follow the appropriate guidelines set by Fannie or Freddie to determine the best option for your situation.

Fannie Mae does not deal directly with the borrower. They work with the lender to determine the loss mitigation program that best fits your needs.

Freddie Mac, like Fannie Mae, will usually only work with the loan servicer. However, if you encounter problems with your lender during the loss mitigation process, you can coil customer service for help at 1-800-FREDDIE (1-800-373-3343).

In any loss mitigation situation, it is important to remember a few helpful hints:
– Explore every reasonable alternative to avoid losing your home, but beware of scams. For example, watch out for:

Equity skimming: a buyer offers to repay the mortgage or sell the property if you sign over the deed and move out.
Phony counseling agencies: offer counseling for a fee when it is often given at no charge.

– Don’t sign anything you don’t understand.

Q. WHAT IS A 203(b) LOAN

This is the most commonly used FHA program. It offers a low down payment, flexible qualifying guidelines, limited lender’s fees, and a maximum loan amount.

Q. WHAT IS A 203(k) LOAN

This is a loan that enables the homebuyer to finance both the purchase and rehabilitation of a home through a single mortgage. A portion of the loan is used to pay off the seller’s existing mortgage and the remainder is placed in an escrow account and released as rehabilitation is completed. Basic guidelines for 203(k) loans are as follows:
– The home must be at least one year old.
– The cost of rehabilitation must be at least $5,000, but the total property value – including the cost of repairs – must fall within the FHA maximum mortgage limit.
– The 203(k) loan must follow many of the 203(b) eligibility requirements.
– Talk to your lender about specific improvement, energy efficiency, and structural guidelines.

Q. WHAT IS AN ENERGY EFFICIENT MORTGAGE (EEM)

The Energy Efficient Mortgage allows a homebuyer to save future money on utility bills. This is done by financing the cost of adding energy-efficiency features to a new or existing home as part of an FHA-insured home purchase. The EEM can be used with both 203(b) and 203(k) loans. Basic guidelines for EEMs are as follows:
– The cost of improvements must be determined by a Home Energy Rating System or by an energy consultant. This cost must be less than the anticipated savings from the improvements.
– One- and two-unit new or existing homes are eligible; condos are not.
– The improvements financed may be 5% of property value or $4,000, whichever is greater. The total must fall within the FHA loan limit.

Q. WHAT IS A TITLE I LOAN

Given by a Lender and insured by the FHA, a Title I loan is used to make non-luxury renovations and repairs to a home. It offers a manageable interest rate and repayment schedule. Loans are limited to between $5,000 and 20,000. If the loan amount is under 7,500, no lien is required against your home. Ask your lender for details.

Q. WHAT OTHER LOAN PRODUCTS OR PROGRAMS DOES THE FHA OFFER

The FHA also insures loans for the purchase or rehabilitation of manufactured housing, condominiums, and cooperatives. It also has special programs for urban areas, disaster victims, and members of the armed forces. Insurance for ARMS is also available from the FHA.

Q. HOW CAN I OBTAIN AN FHA-INSURED LOAN

Contact an FHA-approved lender such as a participating mortgage company, bank, savings and loan association, or thrift. For more information on the FHA and how you can obtain an FHA loan, visit the HUD web site at http://www.hud.gov or call a HUD-approved counseling agency at 1-800-569-4287 or TDD: 1-800-877-8339.

Q. HOW CAN I CONTACT HUD

Visit the web site at http://www.hud.gov or look in the phone book “blue pages” for a listing of the HUD office near you.

Short Sale, Foreclosure

Many a times, for some people questions comes to mind: What is a short sale – It is when the property owner will accept less sale price than the amount which is due as per the loan amount when the property is sold. Lenders sometimes accepts low amount to avoid the expense and time of a foreclosure. A short sale generally persists when the loans amount on the property is greater than what the property can be sold for. The short sale is the best alternative for owners who no longer can afford make their mortgage payment and want to avoid foreclosure which is more embarrassing.

Though a short sale seems to be the only solution to the problem avoiding foreclosure, the fact is there are other solutions which a short sale realtor can guide you through that will benefit the home owner as well as the lender. You need to be very careful when transacting with a third party company regarding the short sale. A lot of people understand they can make profit in short sale which might be true in some circumstances with the help of a short sale realtor.

Some of the best options to go for advice from short sale realtor to avoid foreclosure:

1. The value of your home is more than what you owe, you can get a good price to pay off the mortgages and avoid foreclosure. An advice from Short Sale Scholars can guide you the right way.

2. Advice from Foreclosure Realtor comes handy to show your lender that foreclosure is more costly & they are not likely to do any better foreclosure & remarketing.

3. Foreclosure affects your credit rating and to avoid all these painful time expert advice from Foreclosure Realtor and Short Sale Realtor come handy.

Any short sale investor knows that one of the biggest challenges they might face is dealing with the lender. The short sale process is lengthy, importantly when short sale investor has to deal with more than one lender to come up with best price for the property. If the foreclosure property is auctioned it is a more of a possibility that it is sold in lesser market value leaving you with no money in hand to go for another property to lease. Due to lack of funds after selling their foreclosure property owner will be left in cold with no money to buy another property with some down-payment. There are many reasons why we should avoid a foreclosure taking the help of Foreclosure Realtor. Foreclosure is a public preceding that property owner risks your own social status. If your mortgage sum is more than the current value of your property, you may finally to consider Short Sale with the help of Short Sale Realtor.

You need to hire an experienced Shore Sale Realtor as they are the specialist and will look after all your issues. Once you have a Short Sale Realtor whom you can trust, he will be authorized by you talk on your behalf to negotiate with lenders and short sale buyers. Expert advice from Short Sale Scholars comes effective in these situations for short sale investors and property owners as well to avoid foreclosure.
http://www.ShortSaleScholars.com

Article Source: http://www.articlesnatch.com

About the Author:
This is Euriq Gates as a story writer about short sale foreclosure

Read more: http://www.articlesnatch.com/Article/Short-Sale–Foreclosure/939443#ixzz1NNUepSyG
Under Creative Commons License: Attribution No Derivatives

7 Tips for Short Sale Success.

By: G. M. Filisko

Have to sell your home for less than it’s worth Our seven tips will help you get the best price.

When you owe more on your home than it’s worth, but you have to sell, you need to squeeze every dollar possible from the sale.

Here are seven tips for navigating the short-sale process.

1. Know who you owe
A short sale has to be approved by any company that has a mortgage or lien against your home. That includes your first, second, or even third mortgage lender, your home equity line lender; your homeowners or condominium association; and any contractors who’ve placed a lien on your home. Make a list and start talking to everyone early in the process. Ask what documents they’ll need from you.

2. Pick your short sale team
You’ll need to work with a team of short sale experts, including a real estate agent, real estate attorney, and your accountant. Look for agents and attorneys who advertise themselves as short sale experts. Interview at least three, and listen carefully for signs that they understand the complexities of the short sale process.
Agents should explain how they’ll arrive at a suggested price for your home. Ask them to show you a sample short-sale package or for an example of a prior short-sale success.

3. Get your documents ready
Gather the paperwork your creditors and mortgage lenders asked to see, like your listing agreement and a hardship letter explaining why you need to do a short sale. You’ll also need proof of what you earn and what you owe as well as copies of your federal income tax returns for the past two years.

4. Expect delays
Despite a federal rule saying banks participating in the federal government’s Making Home Affordable loan modification program (http://www.houselogic.com/articles/making-home-affordable-modification-option/) must respond to short-sale offers within 10 days, it may take weeks or months for your lender to decide whether to allow you to sell your home in a short sale–and even longer if you must negotiate with more than one lender or lienholder.
Your lender and lienholders don’t have to agree to your proposed short sale. They can reject your terms or make a counteroffer, which can create further delays.

5. Anticipate demands
Discuss with your short-sale team how you should respond to common short-sale demands from lenders. For example, are you willing to sign a promissory note agreeing to pay outstanding amounts after the sale is complete

6. Know the tax implications
Any unpaid amount of your mortgage “forgiven” by your lender through a short sale may be considered income to you under federal tax rules. Ask your attorney or accountant whether you qualify to exclude that amount as income on your tax returns under the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act. Also ask if you’ll be required to report amounts “forgiven” by other lienholders, if applicable.

7. Consider how the short sale will affect your credit and what you must pay
Ask whether your lender will report the short sale to credit-reporting agencies. Having a portion of your debt forgiven may negatively affect your credit score, but a short sale typically damages your score less than a foreclosure or bankruptcy.
Ask you lawyer whether you’ll be responsible for paying back the lenders’ loss. If the lender says it will forgive any losses on the sale of your home, get that promise in writing.

Other web resources
More on short sales (http://www.nolo.com/legal-encyclopedia/article-30016.html)

IRS information on the Mortgage Forgiveness Debt Relief Act and Debt Cancellation (http://www.irs.gov/individuals/article/0,,id=179414,00.html)

This article includes general information about tax laws and consequences, but isn’t intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.

G.M. Filisko is an attorney and award-winning writer. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Visit houselogic.com for more articles like this. Reprinted from HouseLogic with permission of the NATIONAL ASSOCIATION OF REALTORS
Copyright 2010. All rights reserved.

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