Tag Archives: short sale

Get A VA Home Loan, And Buy A Home Today

Getting a VA home loan is one of the benefits that a Veteran has so that they can become a home owner, WITH LITTLE TO NO MONEY. There are other home loan programs available, such as a conventional home loans, or FHA home loans. But the VA home loan has a couple of very important features 1) is NO MONEY DOWN , THAT IS ZERO, NO DOWN PAYMENT. 2) Unlike a FHA loan that has mortgage insurance with an upfront fee and a monthly fee that can add several hundred dollars to the mortgage payment. VA does not have a monthly mortgage insurance payment tacked on top of your mortgage payment. Which allows you to either qualify for more house and even have a lower payment than someone with a loan amount as yours but they have a FHA loan.

for our troops

You don’t need to have a perfect credit to get a VA home loan you can get home loan with scores as low as 550. Compare that to a FHA loan and with the same scores, minimum down payment would be 10% VA will still allow you to come in with zero down. Please keep in mind that down payment and closing costs are two different things you still have to pay for escrow fees, the appraisal etc. Which can be a few thousand depending if the seller is willing to pay for any of the closing costs.

If you think you are ready to start the process on using your VA benefits to get a home loan one of the things you will have to do is apply for your certificate of eligibility. Click Here, and just follow the instructions, you will need to get your certificate of eligibility in order to get your VA home loan.

Something to keep in mind that even though there is not a monthly mortgage insurance fee added to your payment VA does charge what they call a funding fee that can be financed on top of your loan. If you have never used your VA benefits then the funding fee is 2.15 % of the loan amount and is added to the total of the loan amount. If you have used your VA benefits before then it does go up to 3.3%. It is a good chunk of change but you still coming in with nothing down and you have no monthly mortgage insurance payment like you would with a FHA loan which can easily be $2-300 more a month every month for the life of the loan. Now VA is looking pretty damn cheap. Nothing is really free and the funding fee is really just in case you do not pay and there is a foreclosure done on the home. The funding fee is really like an insurance on the loan.

Now lets say you filed for Bankruptcy or you had to do a short sale or a foreclosure in a previous home you had and now you are recovering. On a bankruptcy you only have to wait two years after it is discharged from the date you filed but from the date it was discharged. Very important the date your bk is discharged don’t get a bunch of debt but start working on re-stablishibng your credit. The easiest and fastest way is getting a secured credit card or even getting added on to an account. Try to shoot for 3 trade lines they do not have to be big accounts can just be $500.00 accounts but they will count towards establishing some sort of credit history and will get you points going again.

Now if you did have to do a short sale or even a foreclosure you only really need to wait two years from that date to qualify again and use your VA benefits. There is one catch, if the VA lost money in that transaction you might not have full benefits but if you know you did do a short sale or foreclosure, the best thing to do is check with the VA on that. To see if you have full benefits or only partial.

if you are interested in getting a VA home loan just ask me.

Bookmark and Share

Is The Debt Forgiveness Act Still Available In 2014 ?

This is one of those situations where things are just not fair.  The debt forgiveness act was in acted in 2007 when the market just came tumbling down and home values were not worth what they once were.   It was intended to ease the burden of someone that just lost their home or just did a short sale so that they can avoid paying the phantom tax.   As of now the debt forgiveness act expired Dec. 31, 2013.

So what does that mean? The economy has gotten better but I still see many struggling to hold on to their homes.  So lets say someone has to do a short sale or may just out right lose their home.  If you owe lets say $300k on your home but have to sell it for $200k because its just not worth what you paid for it since you bought it during the peak.  Well that difference, is counted as income.  So now you have just made a $100k that you never got.  Which for some people can be one very huge tax bill.

The really sad thing about all this is that banks can still write off the losses but the every day person cannot.  I know that supreme court as deemed corporations, “a person” so this goes without saying that some people just have privileges that others do not.  Unless congress gets it together and reinstates the forgiveness act, the regular person will not be able to write off those losses.   It is up for discussion currently with congress and there is a bill to reinstate it, but as of now it is expired.

Bookmark and Share

What To Do In A Short Sale

 

If you are in the process of doing a short sale or think you have to do one.  There are just a few things that you have to do.  Now I know that for many people this is a tough decision and even here in the Santa Maria real estate market we are still doing short sales.   But for some its one of the best decisions that you can make.  The reality is that sometimes you just have to look at things from a business point of view as an investor and take the emotional component out of.   The sooner you can look at things from a different perspective the easier it will be to move ahead and not only start over.  But you may even find yourself in a better position.

There are just a few things to remember that you have to do when you are doing a short sale.  Just follow the steps below.

[sociallocker]

1) Do not move out if you move out while in the process and before your lender approves your short sale.   Many times they will deny you any kind of financial assistance to relocate.  Since you moved out you no longer need the assistance.  This can actually be thousands of dollars and can vary from loan to loan as well from lender to lender.  So there is not a set amount or standard amount.   The largest dollar amount our office was able to get for a client was close to $20,000.00.  But on the flip side when your agent does get the approval you need to seriously make arrangements to be out in time, before the transaction closes.  You can forfeit those funds if not and kill the short sale transaction.  But just for the record typically a person receives $3,000.00 to $5,000.00.  But then some there are times the bank will no pay anything so keep that in mind as well.

Remember you have not been paying anything for months during the time the short sale has been in the approval process.  So when the time does come you should have plenty of money saved up.  Just because your not make mortgage payments does not mean you have extra money to spend.  You should be saving like your life depended on it.  Because in a way it does if you plan on starting over and money does make that a bit easier to do.

2) Income documentation you need to be organized your lender and agent will be asking for this repeatedly.  To the point of frustration.  Pay stubs and bank statements.  Your lender wants to see if based off of your paystubs if it is possible for you to afford those payments lets say if you were to get a home loan.  As well as bank statements just how much money do you have in the bank.  They will ask for these items in the beginning and near the end and several times during the whole process.   But if you prepared and organize you can easily just give it to them without any delays.

3) Most importantly is patience.  The short sale process is frustrating for everyone especially your agent.  He does not get paid till the transaction closes.  He will be make calls upon calls and resending the information over and over again.  If you take into account the number of months it takes to close a transaction, hourly income starts to look less and less.  So patience is needed because the process does take months we currently at the time of writing this have one transaction that we have had for over a year now.   Still sending up dated paystubs and bank statements to the lender only hoping for an approval soon.

4) One last thing you agent is paid by your lender.  You should not have to pay your agent anything to do the short sale for you.  If your agent is asking for funds upfront or some kind of processing fee this is where you need to cut your ties and look for another agent, pronto.

Good luck out there.

[/sociallocker]

 

Bookmark and Share

Buying A House After A Foreclosure

Just about everyone at this time has been touched by the mortgage collapse and it would be hard to find anybody which did not know somebody which had to go through a foreclosure or a short sale on their house.You may have recieved something either in the mail or left on your door stating how its better to do a short sale instead of a foreclosure .
It is very possible to get a loan right after your short sale if your bank allowed you to do a short sale without missing any payments. Getting the approval on the short sale sometimes can be kind of tricky, usually the bank wants you to not make the payment before they will even consider allowing you to do a short sale.
If you did miss mortgage payments in doing a short sale you will have to wait at least 3 years before you can get an FHA loan, now thats 3 years from the date of the short sale not from the date you started to fall behind.  Sometimes losing your home through a foreclosure or a short sale does not make a difference in regards to how fast you can buy a home again if you are going through a FHA loan although it will in a conventional you will have to wait 7 years if you were foreclosed on.   So after those 3 years expire you can put down payment on a home using an FHA loan with merely 3.5% like everyone else trying to get a home loan.
When looking at other loans that are not FHA loans there are some differences. loan, and getting a regular loan.  Currently Freddie Mac and Fannnie Mae are the two biggest investors at this time.  These two big govt. sponsored corporations are buying the majority of the loans that the banks are doing.From the date of closing your short sale your waiting period is only 2 years to get another home loan.  But please keep in mind if you are on another loan whether it is investment property or you co-signed on it, there can be no mortgage lates within the 12 months of the application.  That is a big difference when it comes to getting back into the market.  Credit is also going to be a determing factor.

Homes are much less now than they were 3-5 years ago and more than likely there will not be any dramatic price increases in the next 2-3 years.   In closing if you find yourself in a position of possibly having to do a short sale it could actually be a blessing in disguise.  If you are struggling to make those payments on a house that is only worth its value in today’s market. 

Focus on rebuilding your credit and saving money as much as you can during the short sale process.  Some short sales can last as long as a year, so that is an entire of not making any mortgage payments.  So save, save, save and you could possibly have another home just as nice as the home you had to walk away from and with only have the mortgage payment.

Bookmark and Share

What Happens In A Short Sale Home If It Appraises For More ?

Donald asks…

what happens if offer is lower and contingent than the appraisal value?

I put an offer in a short sale home higher than asking price, but what if appraisal value comes out higher?

admin answers:

The answer is you have instant equity in the home if your offer is accepted and the appraisal comes in higher. However the bank does not have to accept your offer on a short sale and getting an offer accepted can take up to 6mths. More than likely they already have and appraisal and they usually have done their own BPO as well which is a broker priced opinion.  Which is really where they hire another agent to do a mini appraisal of what they think the property is worth.  The bank is already taking a loss on the loan by doing the short sale.  But what they want is at least something close to fair market value.  So even if the homeowner accepts your offer if the value is significantly higher from your offer they do not have to accept the offer.   Hope this helps usually the problem is if the value is not there as compared to what you did offer.

Bookmark and Share