Many people are experiencing a negative equity situation with their homes.  At some point most  home owners ask themselves if they should consider having their home go back to the bank through foreclosure or should they try to do a short sale.

Most home owners do not chose foreclosure.  They lose a job, are transferred, are facing a divorce, maybe they are having medical issues, or lately they have too much debt due to lowering home values and increasing mortgage rates from bad loans.  Foreclosures have a negative effect on your credit.

An alternative to foreclosure is to sell your home through a short sale.  A short sale means that you sell your house for less than you owe.  Short sales require approval from your mortgage company.  Short sales also can have a negative effect on your credit, but not as bad as a foreclosure.  Below we will discuss the differences between a short sale and a foreclosure.

Credit Score

A foreclosure can lower your credit score from 250 to 300+ points and will continue to effect your score for about 3 years.

A short sale can lower your credit score as little as 50 points and can affect your score for about 12-18 months. (This depends on whether or not you are making your other debt payments)

Credit History

A foreclosure will remain on your credit history for 10+ years.

A short sale is not reported on your credit history because the loan is typically reported as “paid in full” or “settled”.

Future Loans

On most loan applications there is a question that asks if you have ever been foreclosed on in the last 7 years.  Checking yes to this question could affect future mortgage rates.  There is no question on a loan application regarding a short sale.

A foreclosure makes a home owner ineligible for a Fannie Mae loan for 5 years.

A short sale will be eligible for a Fannie Mae loan after only 2 years.

 

Security Clearances

A foreclosure can cause a security clearance to be revoked in most cases which can lead to termination of employment if security clearance is required for the job.

A short sale alone does not challenge most security clearances.

 

 

Future Employment

A foreclosure can cause issues when seeking future employment because most employers require credit checks for applicants.

A short sale does not affect future employment because the account comes up as “settled” or “paid in full”.

 

For more information about putting your home up as a short sale please contact us.

 

 

We do not guarantee these results.  All loans, short sales and mortgage companies are different.  These are average effects of a short sale and foreclosure.  For specific information pertaining to your situation please contact a real estate attorney or your accountant.

First-time home buyers who are veterans or on active-duty in the military are now eligible for a grant through the Dream Makers Program.  Dream Makers offers a grant for first-time home buyers to use towards a down payment on a home.    The grant can be used with a mortgage from any financial institution.  Your mortgage must be a 30 year fixed mortgage with a maximum of 97% of the price financed, meaning the borrower would have to make a 3% down payment.  The property must be a 1-4 family dwelling including town homes and condos.

The program requires the buyers to own the home for 5 years after they purchase it.  If the house is sold before the 5 year requirement is met, the borrower would have to pay back the grant money based on a sliding scale.  If the borrower must move because of a government transfer or PCS no repayment is necessary.  The borrower also has the option of renting the home out while they serve their new duty station.

QUALIFICATIONS

Must be a member of the military-Active duty, Veteran, National Guard, Department of Defense, or Department of Homeland Security employee

First-time Home buyer-you must not have owned a home in the last 3 years, or you lost a home through disaster or a divorce

Gross Household Income-maximum $55,000/year or 80% of your community’s median income based on family size

NOW WHAT?

Figure out how much you can contribute. Minimum is $500.

Fill out the Dream Makers application.

Wait for instructions.

Attend a home-buying seminar in your area.

 

For complete details please visit the Dream makers website at:

http://www.pentagonfoundation.org/site/PageServer?pagename=dream_index

Are you behind on your mortgage payments?  Do you currently have negative equity in your home?  Would you like to find out if you can save your home and lower your payments?  Is it time to do damage control and save your credit as much as possible?  How do I know who to trust and who is just running a scam?

If these are questions you have been asking yourself then you should come to our FREE informational workshop.  We will be sharing new information that could change your life!  Find out what the banks won’t tell you.  We will also be talking about loan modification scams that you should be aware of.  Find out what your options are.

Authority Real Estate has teamed up with The Law Office of Michael Groves to help homeowners discover what options they have so they can make an educated decision as to how they can  save their home and limit damage to their credit.

Michael Groves Law Office has been able to stop foreclosure actions (without bankruptcy filings) and modify mortgages including lowering interest rates, balance reductions, and house payment reductions.

Authority Real Estate has an experienced short sale staff that has successfully negotiated short sales with many banks, including negotiating second mortgage payoffs.  We have worked with many banks including:  Bank of America, Wells Fargo, EMC, Countrywide, Chase, Washington Mutual, Citibank, Provident, Green Tree, Aurora, Nationstar, GMAC, SunTrust, OneWest, Indymac, HSBC, Beneficial, PennyMac, US Bank, Downey Savings, AIG, National City Mortgage, Wachovia, World Savings, Fannie Mae and Freddie Mac

Find out more about these scams:

Bankruptcy Filing Scams

Up Front Fee Scams

Principal Reduction Scams

Short Sale Scams

Lawsuit Scams

HUD Counselor Scams

Forensic Loan Scams

We will be offering 2 information sessions

Saturday~July 9, 2011 @ 1pm & Wednesday~July 13, 2011 @ 6 pm

250 N State Street, Hemet, CA 92543

If possible please RSVP at 951-654-7200 or events@authorityre.com

Please share this invitation with anyone you know!

 

 

 

 

It’s that time of year again.  The day we celebrate the birth of our nation and the adoption of The Declaration of Independence.  The Fourth of July for most is a day to get together with family and friends.  There are parades, barbecues and of course fireworks.   Below are some of the local firework displays in the valley.

July 3, 2011

Soboba Arena will have a celebration on the 3rd.  There will be vendors and activities for children.  A concert featuring the Four Tops and the Temptations will begin at 8 pm.  The fireworks display will begin at 9 pm.

July 4, 2011

Parade begins at 9 am at San Jacinto & Commonwealth, travels down Esplanade to Valley Wide.  The park will have vendors set up and the fireworks display will begin at 9pm.

*Don’t forget its is illegal to do your own fireworks in Riverside County.  The fire danger is especially high this time of year! *

Fun Facts:

311.7 million~US estimated population this 4th of July  Source: Population clock <http://www.census.gov/main/www/popclock.html>

 

$302.7 million~Annual dollar value of shipments of fabricated flags, banners and similar emblems by the nation’s manufacturers, according to the latest published economic census data.  Source: 2007 Economic Census, Series EC0731SP1, Products and Services Code 3149998231
<http://www.census.gov/econ/census07/>

$190.7 million~The value of fireworks imported from China in 2010, representing the bulk of all U.S. fireworks imported ($197.3 million). U.S. exports of fireworks, by comparison, came to just $37.0 million in 2010, with Japan purchasing more than any other country ($6.3 million).  Source: Foreign Trade Statistics <http://www.census.gov/foreign-trade/www>
<http://www.usatradeonline.gov>

For more info about Independence Day  including more fun facts please visit:  http://www.usa.gov/Topics/Independence_Day.shtml

WHAT IS THE NEW CARBON MONOXIDE LAW?

Beginning July 1, 2011 all buildings “intended for human occupancy” must have a carbon monoxide detector installed.   Up to 40 deaths a year in California are attributed to carbon monoxide.   Carbon monoxide is a colorless, odorless gas produced by the burning of any fuel such as, gas, oil, kerosene, wood or charcoal.   Carbon monoxide poisoning can cause headaches, amnesia, psychosis, Parkinson’s disease, personality alterations, memory impairment and death.

 

WHAT DO I NEED TO DO?

The new law requires a carbon monoxide detector be installed in buildings occupied by people.  The detector should be centrally located outside of the sleeping areas.  (Please read manufacturers recommendations when you buy a carbon monoxide detector) A carbon monoxide detector will produce a sound if carbon monoxide is detected.  It looks and acts similar to a smoke detector.  Some are powered by a battery, others models can plug in to a wall and use a battery in case of power failure.  Prices range from just under $20-$80+.  I found models under $20 at Lowes, Walmart, and Target.

 

WHAT HAPPENS IF I DO NOTHING?

The homeowner should receive a 30 day notice to correct followed by a maximum fine of $200 for each offense.

 

WHERE CAN I GET MORE INFORMATION?

http://www.safetyathome.com/home-safety/home-safety-articles/test-your-carbon-monoxide-iq-and-protect-your-loved-ones/

 

Asking Price:

The price you decide to ask for your home is the first element that will determine how many people even look at your house.  If it is too high potential home buyers won’t even bother to look at it.  If it is too low potential home buyers will be wary that something is wrong with your house.  Don ‘t forget your home is only worth what someone is willing to pay for it.

Market Condition:

Unfortunately, the home seller has no control over market conditions.  They are dependent on the economy, interest rates, and how much other homes are selling for.

Property Condition:

Most home buyers want to buy a house that does not require many repairs before they move in.  Buying a home can be a stressful process and most people don’t want the added stress of fixing up their new house after closing escrow.   Another reason property condition is important is because many types of loans have certain requirements in order for a house to obtain financing.  If a home needs major work, you lose a majority of buyers because the bank will require that the repairs are done before escrow closes.

Property Location:

Home buyers usually have a certain neighborhood in mind when they begin their house hunt.  People may choose a certain neighborhood due to proximity to schools, parks, and shopping centers.  Street traffic can affect whether or not home buyers look at your house as well as what your neighbors homes and yards look like.

Contract Terms:

Some home buyers may not be able to pay all of the closing costs, others may want certain accessories to remain in the home.  A home sellers acceptance of contingencies can make or break the home sale.  Whether you decide to allow such items in the contract is up to you, just make sure everything is spelled out in the contract.

203k Loans

A 203k loan helps homebuyers buy a home in need of some rehabilitation.  Normally a bank will not loan on a home unless it meets certain requirements.  Generally there can be no health or safety issues.  This makes it difficult for many prospective buyers since many homes on the market are in need of some kind of work.  A 203k loan is 1 loan but it includes the amount to buy the property and another amount to cover the cost of repairs.  The total loan amount is based on the value of the property after the repairs are completed.

A 203K LOAN HAS:

NO INCOME LIMITS

NO PRICE RESTRICTIONS UP TO $500,000

EASY FHA QUALIFICATION

DOWN PAYMENT OF ONLY 3.5%

45-60 DAY ESCROW PERIOD

The property must be owner/occupied, which means this type of loan is not an option for investors or people looking to buy a second home.  The loan can be a purchase loan or a refinance loan.

ELIGIBLE PROPERTIES:

SINGLE FAMILY RESIDENCES UP TO 4 UNITS

HOMES MUST BE AT LEAST 1 YEAR OLD

CONDOS ARE ELIGIBLE IF THEY ARE OWNER OCCUPIED

For more information about requirements and restrictions please visit:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k/203kabou

STEAMLINE 203K

A streamline 203k mortgage is a limited repair program that lets homebuyers finance up to $35,000 in addition to their mortgage so they can improve the home before they move in.

A streamline 203k loan has limited repairs.  Some of the eligible repairs are:

Roofs, gutters, and downspouts

HVAC systems

Plumbing/electrical work

Flooring

Minor remodeling

Paint

Weatherization such as insulation or weather stripping

Appliances

Accessibility for disabilities

Lead based paint issues

Decks, patios, porches

Windows/doors/siding

Septic/well issues

With a streamline 203k major repairs are ineligible.  Some examples of ineligible repairs include, new construction, structural damage repairs, landscaping, or any job requiring more than 6 months to finish.

For more info about the streamline 203k program please visit Duane Gayer’s website.  He is a HUD certified 203k consultant with years of experience.  You can find his website at www.203k.org

A 203k loan takes a little longer to close than a regular FHA or conventional loan because of the work required.  Typically the steps involved include:

1.       Get prequalified for a loan

2.       Locate a property

3.       Preliminary Analysis of the property (how much work is needed, rough estimate, projected value after work is completed)

4.       Accepted sales contract

5.       Lender begins working on file

6.       Work write-up and estimate

7.       HUD case # is assigned

8.       Fee consultant visits property

9.       Appraisal

10.   Lender Review

11.   Conditional Commitment/Statement of appraised value

12.   Lenders Firm Commitment

13.   Loans Closes

14.   Construction Begins

15.   Final Inspection

Ask your lender if they can do this type of financing or your real estate agent may be able to refer you to someone.

Are you trying to sell your home?  Do you need some fast, easy and cheap ways to help make your house look better to potential home buyers?  The front of your house is the first part of your home that people begin judging.  The pictures your real estate agent uses on the internet and on flyers will be of the front of your house.  Sadly, some people will not even view the inside of your home if they can’t get past the first impression they got from the outside of your house.  Here are 10 ways to help increase the curb appeal of your home.  The first five are free.  The second five cost some money but will help make your home look fresh and well maintained.

• Clean the Yard- The cheapest and easiest way to work on your home’s curb appeal is to simply clean your yard.  Pick up toys, trash, and animal waste.  Don’t forget to rake up those leaves.  Cost=$0
• Weekly Lawn Maintenance-Make sure you do the mowing, weeding, edging and raking.  Also trim bushes and any tree branches that are getting out of control.  Keep the grass watered to prevent brown spots from showing up.  Cost=$0
• Clean the windows-Keep the inside and outside of those windows clean.  Cost=$5 if you need to buy window cleaner
• Power wash the house-Use a power washer to clean the siding, driveway, and walkways. Cost=$0 if you borrow a power washer
• Use your Garage-Keep yard tools put away.  Park your cars inside the garage.  If you have a carport make sure you use it to park your car, not to store stuff.  Cost=$0
• Add some color-Use plants, flowers and stones to update your yard.  Cost=$50+ depending on what you buy
• Repair and/or Replace-Fix broken, shutters, shingles and gutters.  Replace old hardware such as door knobs, locks, house numbers and exterior light fixtures.  Cost=$50+ depending on what you replace
• Upgrade-Replace doors to give the house a new look.  A new mailbox is the first thing people see when they pull up to your house.  Cost=$50+ depending on what you replace
• Paint-Maybe the whole exterior of the house doesn’t need to be done or maybe it’s just more work than you wanted to do.  Painting at least the trim will help give your house an updated look.  Cost=$100+
• Walkways-Does your house have a walkway?  If not, making a walk way is a great way to invite people to come inside.  Don’t forget to add lights so it is easy to see at night.  Cost=$100+

If you need some ideas, or need more advice on what plants or products would work best for you and your home consult a professional at your local home improvement store.

When buying a home one has to consider whether or not they should get a home warranty.  I personally think you should get a home warranty.  Why?   I bought my home about 12 years ago.  After being in it for about 6 months we had some plumbing issues.  Since I had a home warranty the total cost to fix these problems was only $50.00 which was the cost of the trade call.  Since I have become a real estate agent all my clients have gotten a home warranty.  Every single one of them has used their warranty and saved hundreds and sometimes thousands of dollars.  They have had complete replacement of a/c units, water heaters,  and spa equipment.  All they paid was a trade call fee.

How do you get a home warranty and how does it work?

When writing an offer on a house, you can ask to have the home warranty paid for by the seller or you can pay for it yourself.  Sometimes the sellers will pay all or half of the home warranty, which is usually good for one year.  After that time you can choose to renew it or not (at the warranty companies discretion).

After you close escrow your warranty goes into effect.  The company will give you a plan number which you will use when you call to have a repair done.  They send out a technician that they contract out and you pay the trade call fee (this fee differs depending on which home warranty company you use).  The technician figures out what the problem is and fixes it.  If they can’t fix it, they replace what needs to be fixed and guess what?  All you paid was a trade call fee (even if they have to replace a whole appliance).

What is covered by a home warranty?
Many things are covered by a home warranty such as; duct work, garage door openers, plumbing issues, water heaters, garbage disposals, electrical systems, stove, dishwashers, and exhaust fans.  Some of them cover air conditioning units.  For an extra fee you also have the option to add swimming pool equipment, roof leak repairs, washer/dryers, refrigerator, and septic systems.

There are limitations to what is covered, please check with the home warranty company that you decide to use for limitations, prices, and extra fees.

Is a home warranty only for home buyers?

No, home sellers can also order a warranty for the listing/escrow period.  That way if an appliance breaks or something else happens while trying to sell the home, the seller would not have to pay a huge amount to fix the problem.

 

For more prices and more information please visit a home warranty website:

Old Republic Home Warranty– www.orhp.com

American Home Shield– www.ahs.com