Consider This Factor Before Invest Your Money on Property

Whether someone is a first – time home buyer, or someone who recently sold a house, and looking for another, real estate professionals, are often asked, whether the individual, should buy, or rent a place to live. Rather than providing a simplistic, basic, one – size – fits – all, answer or response, let’s review some of the considerations, factors, etc, will might affect one’s approach. In an attempt to remove the emotional factors (which is almost impossible, when it comes to the home – finding process), this article will review 6 factors, which might be relevant to one’s very personal decision.

1. Down – payment: Before considering anything else, one must consider finances, etc. The first consideration, therefore, must be, does the person have the down – payment? Understand, that while the percentage required to put down, to get a mortgage, in most cases, this is 20%. When one obtains a mortgage requiring a lower down – payment, it may bring with it a slightly higher interest rate, different qualifying terms, and most certainly, a larger monthly carrying charge/ expense.

2. Credit – worthiness; existing credit used; credit needs: Many factors go into what a lending institution might consider credit – worthiness. Of course, one’s credit score (also known as FICO, etc) is often a qualifying, or disqualifying factor. Unless that score is around 700, or higher, one will usually be unable to get the best rates available, if able to qualify for a mortgage, at all. Another factor, is the amount of total credit already approved for, and how much of that is used. Most banks have a maximum percentage for credit used, as a percentage of income, as well as a maximum figure, for the total credit, including other debt and the new mortgage. This figure is often somewhere around 36%. Obviously, the higher the down – payment, the lower the amount of mortgage needed!

3. What are your needs?: Before looking, determine your real needs. This should consider factors, such as affordability, and comfort level, location, size of house, and other relevant factors.

4. Your plans?: Are you planning on buying a starter home, or a keeper? How long do you expect to live here? Are you from the general area, and if not, are you sure, you’ll like this area? Many people from outside an area, considering relocating, often rent for a year, to be certain, it’s the right fit, for them. Also, the financial considerations/ expectations, depending on how long you plan to remain in this new location, are major determining factors, in terms of buying or renting.

5. Personal/ family circumstances: Are you planning, in the foreseeable future, to undergo some sort of major change in your family situation, such as marriage, divorce, children, etc? These are all factors which should go into your house – hunting considerations.

6. Market conditions: Sometimes, there is a buyer’s market, and sometimes, a seller’s. At other times, it’s somewhat neutral. Remember, most people, especially those seeking a somewhat permanent stay (10 years or more), should find a house, which will fit their needs. There are also advantageous times to buy, such as currently, with the low mortgage interest rates. Understand that as little as a 1% difference in interest rates, may make hundreds of thousands of dollars, of difference, over the life of the loan. It also makes a huge difference, in terms of the price home, one might be able to afford!

Whether you buy or rent, is a personal decision, each one must make for himself. A very short stay, anticipated major changes in one’s lifestyle, finances, or inability to find the right place, often suggests renting, at least for a short – term, such as a year. Don’t let anyone pressure you to make a decision you aren’t comfortable with!

 

How To Choose A Mortgage Lender

When you buy a home, you’re in for a long-term commitment. You’ll have a mortgage payment for 15 to 30 years, so it’s smart to find the perfect mortgage lender for your requirements. Consider the following tips when making your decision:

Decide what kind of lender you want – small or large. If you prefer a more personal touch and a lender who will know your name you will more than likely want to go with a smaller lender. If you are the type of person that cares more about the interest rate, a large lender may be your best bet.

Talk to your real estate agent. A top-notch agent will not limit their recommendations to their in-house lenders. And most importantly, savvy loan officers take especially good care of clients that are recommended by real estate agents. So definitely use this to your advantage. This personal connection can be a big help when it comes to reducing closing costs.

Know your potential lenders. The competition between lenders is fierce so it’s best to know what’s available. I highly suggest going local. Online lenders are plentiful, but a local company comes with the added benefit of knowing the neighborhoods, properties and the real estate professionals in your area. Here are the most common lenders you can choose from.

· Credit Union: Member-owned, offering favorable interest rates to their members.

· Mortgage bankers: These are bankers who work for a specific financial institution and package loans for the banks underwriters.

· Correspondent lenders: These types of lenders are often local mortgage companies that fund your loan but rely on other lenders such as Wells Fargo, Chase and others to sell your loan to as soon as it is funded.

· Savings and loans: These institutions were once the base of home lenders but are now very hard to find. S&Ls are smaller institutions that are very community-oriented and worth speaking to.

Always compare rates from several lenders. This is where your homework begins. As I noted above there are many lending options – neighborhood banks, commercial banks, credit unions and online lenders, so you have many options to consider.

Once you have several quotes, compare the rates and costs and decide which makes the most sense for you. Don’t forget, everything is negotiable so make sure you have the best rate available because a low rate can save you thousands of dollars over the life of the loan.

Think beyond the dollars. Keep in mind that finding a mortgage lender involves more than just obtaining a good interest rate. Make sure the company is staffed by professionals who will effectively steer you through the entire process. Choosing a lender that displays honesty, integrity and are committed to making you the best deal possible is of utmost importance.

Narrow your choices by asking your friends, family or even your real estate agent for referrals. Once you have some options make sure you ask them the right questions:

· How do you communicate with your clients – email, text or phone? And, how quickly do you respond to your messages?

· What are your turnaround times on preapprovals, appraisals and closing?

· Ask what fees you will be responsible for at closing and can any of those fees be rolled into the mortgage?

· Don’t forget to discuss the down payment requirements

Get Your Credit Score in shape, as it will largely determine the terms of your mortgage. The higher your credit score the more power you will have to negotiate better rates from your potential lenders.

It will be important to make sure your credit reports are accurate. Get your report from the three major credit bureaus: Equifax, Experian and TransUnion. Remember, they are required to provide you with a free copy of your credit report every 12 months.

Try to pay off your high-interest debt in an effort to lower your overall level of debt as quickly as possible. This will improve your debt-to-income ratio. Also, paying off credit cards and unsecured loans before you buy a home will free up more funds for the down payment.

Always read the fine print. Payments on a mortgage are not the only costs associated with homeownership. Make sure you ask your lender to line out all the additional costs – closing costs, points, origination fees and any transaction fees there might be. Ask your lender for an explanation of each cost.

Always examine the fine print of all your loan documents, especially the Loan Estimate and Closing Disclosure. These documents will tell you the exact finance rate, who pays the closing costs, contingencies, closing date and many other important details.

Just remember, there are throngs of mortgage lenders ready to accept your application. Just because a lender accepts your application doesn’t mean they’re the right option for you.

At allU.S. Credit Union, we care about our members – and that’s why we hope you will consider us when choosing a mortgage provider. Our goal is to make your home-buying process as seamless, stress-free and affordable as possible. When you work with us you will receive:
• Competitive rates
• Flexible terms
• Variety of financing options
• Simple application process
• Helpful guidance from start to finish

 

Tips To Get Pre-Approved Before Buy House

Prior to looking for a home, the first step you should take in the home buying process is to complete a mortgage pre-approval with a knowledgeable and trustworthy lender. Be sure to provide honest and accurate information to your lender. This will help the loan officer find the best mortgage options for you and ensure the fastest and smoothest loan approval process. The following suggestions will help expedite the loan process.

• Read All Documents – Make sure you thoroughly read all the loan documents. Ask your loan officer to explain anything that you do not understand. Never sign blank or incomplete documents.

• Be Truthful – Truthfully disclosure all your income sources and debts. Do not fabricate or alter any documents.

• Explain Your Employment History – Thoroughly explain and document any part-time employment or gaps in your employment history.

• Source and Document Your Funds – All gifts must be fully documented with a paper trail. Do not accept cash as a gift from a relative for the down payment. Only seasoned funds are acceptable as gifts.

• Credit Issues – Thoroughly explain and document all past credit problems.

• Educate – Ask your loan officers to explain the terms of the loan, including any prepayment penalties, variable rate features, and any stipulations on how to eliminate private mortgage insurance.

Once your pre-approval has been issued by the lender, be sure to ask your loan officer to review with you all the loan programs your pre-approval includes. If you are a first time home buyer, you may qualify for down payment assistance, a zero down mortgage, or a special interest rate. While looking for a new house, you may find a property that needs a renovation loan or a condominium that can only be financed with a particular loan type. If you are looking a newer house, a construction or draw loan may be the best mortgage type for you. Be sure you thoroughly understand all your financing options before finding the house of your dreams. During the house-hunting process, keep an open line of communication with your loan officer and discuss financing options and inform your lender of any major financial changes that happen between the date your mortgage pre-approval was issued and the loan closing. If any changes occur to your financial situation, such as: a new job, new loans, or large gift that you intend to use towards the down payment, be sure to inform your loan officer so he is aware of these changes.

Keeping your lender updated will eliminate delays and the surprise of a possible mortgage denial. Having a mortgage denied due to changes in your financial picture, especially after telling your friends and family you bought a house can be embarrassing and heartbreaking. Be sure to talk to your lender, so you have a thorough understanding of the mortgage requirements and programs available to you.

 

Choose Your Home Before You Retire

If you’re considering retiring in the next 8-10 years then you might want to start considering to buy your retirement home! If you buy it early there can be significant financial benefits. This is especially true if you’re planning on getting a mortgage.

By doing so early you’ll be taking advantage of the current low-interest rates as well! 30 year fixed mortgages have dropped to approximately 3.4% currently. Not only are there some appealing saving options but there’s considerable financial benefit to putting money towards your retirement home while you’re still employed. So let’s jump right into some of the most important reasons you should consider buying your retirement home so far in advance.

Getting approved for a mortgage

When your loan application is being evaluated your debt-income ratio will be a very important aspect of that evaluation. This ratio will obviously be in a better position while you’re employed. Which means, you’ll have an easier time applying for your mortgage while you still have a reliable income.

If you waited to apply for the mortgage until you retired, it’s possible that you’ll minimize the size of the loan you could potentially apply for. Also, you can start chipping away at that mortgage ahead of time and take less of your allotted retirement income out of your pockets. Essentially, you’re getting well ahead of the overall financial impact a mortgage can have.

Renovations

Odds are when you finally pick your retirement home you’ll be looking to make some improvements. If you’re purchasing a newly built home or building your home from the ground up however, you can ignore this section.

It’s definitely recommended that you set yourself a budget for the renovations you might have in mind when planning to buy your retirement home. Referring back to the first point made about securing your mortgage early. It’s also very beneficial to have a steady income from working full-time during the renovation process as well. It’s always possible to uncover a random setback and this steady income can help you deal with it accordingly.

Chipping away at that mortgage

Like I said earlier, beginning to pay off your mortgage early will put you well ahead of the game once you buy your retirement home. The ideal goal is to obviously be debt free during retirement. For that very reason, some may choose to rent when they retire. However, if you’re choosing to become a homeowner, the sooner you can start paying off that mortgage the better!

Not only are you getting ahead of the game initially when you buy your retirement home, but you could make additional payments as well. Getting ahead 8-10 years on that mortgage is one thing but being able to possibly afford additional payments while you’re employed? You could cut your mortgage to a 15-year mortgage by the time you’re ready to move in.

Long term plans

Budgeting your living expenses for retirement and to buy your retirement home, can be rather unpredictable. However, if you already have your retirement home set aside you can get a very good idea of what it will cost on a monthly basis to live there. So owning your home in advance gives you years of planning in terms of financial allocation.

Your portfolio

Finances willing, if you can carry two mortgages at once after you buy your retirement home, you have the opportunity to rent out the house those 8-10 years before you actually want to move in. Essentially allowing tenants to cover the cost of the mortgage while you’re waiting to retire. Or you could allow yourself to retire early by utilizing the additional income from your potential tenants.

Additionally, you should look into the potential tax benefits of making it a rental property. There are a number of benefits to renting out your additional property after you buy your retirement home, before you actually decide to move in.

If you have any more questions regarding how to buy your retirement home, don’t hesitate to ask! Your retirement should be treated with careful planning. Living in comfort financially should be a very manageable task for you to accomplish.

 

Between Buy and Build Property

When families, or individuals, first begin to think about purchasing a home, the question often arises as to whether they should buy a previously owned house, and then add a few personal touches, or whether they should hire a custom home building company to help them design their own. There are benefits and downfalls to both, making it a tough choice.

Buying

Buying a new home has certain conveniences that many people appreciate, like the fact that everything is already done. For example, the washer hook up is already in place, the walls are already insulated and the bathroom is all ready to be used. This saves the hassle, and possible conflict of making major decisions, which can be a huge relief for individuals that are a bit indecisive. Buying a home means that buyers can move in sooner, and they may save money in the long run, depending on the house.

The same things that are positives have the potential to turn into negatives. It may be nice that the washer hook up is already in its designated spot, but what if it is in the kitchen and buyers would prefer it in the bathroom. This is a small adjustment, but when a buyer is not satisfied with the minor things, it can all build up over time. Also, the bathroom may already be ready to be used, but how old are the pipes?

The pipes, furnace, central air system and the very foundation of all previously owned homes have been in use for several years when the building is purchased, and they may need replaced sooner than buyers are prepared for. A used furnace is more likely to need repaired than a brand new one, and the same rule applies to everything in the house.

Building

Working with a professional home builder can be fun and exciting. Every room will be the exact size that the buyer wants or needs, buyers will be able to have an energy-efficient home, and the ability to personalize every space guarantees that custom homes will have more personality. Even the floors will be perfect, whether they are hardwood, tile or carpet.

Vital components of new homes, such as the furnace, will have less wear and tear, costing first time buyers less money in the long run, and less hassle. Last, a professional home builder will make sure that everything is exactly how the buyer wants it, eliminating the need for renovations, and the stress that can come with each new project.

Building a house can be stressful for buyers that are unsure of what they want. Are open spaces better or closed off rooms? Where should the washer hook up go? Qualified home builders with enough experience can help make some of these decisions a little bit easier.

The only other downside to custom-built homes is that it may be more expensive when looking at the short-term cost. Brand new furnaces are not cheap. On the other hand, most buyers will wind up with a brand new furnace if they purchase an older (cheaper) house in the long run anyway.

All in all, it boils down to whether buyers would like to spend a little bit more money when first buying a home for a brand new home that has been designed to meet their needs, or whether home owners would like to spend more money in the long run as renovations take place and things, like the furnace, need replaced. Taking the time and money to hire an experienced home builder can save families years’ worth of stress and hassle.

 

Please Never Say This When You Buy Home

Seeing something that you love (or hate) can cause you to blurt out all kinds of things when buying a house, some of which you may regret. Because while you can (and should) at all times be upfront with your real estate agent, you might not want to be quite so forthright around the sellers (or the listing agents working for them).

So before you decide to step into a house and stick your foot in your mouth, heed these top things never to say to sellers or their real estate agents when you are shopping for a new home.

1. “This is my dream house!”

Have you ever played poker? Well then you should know that if you would like to maintain a strong negotiating position, you should never tip your hand… In the process of buying a house, interested parties who express their unchecked passion for a house are shooting themselves.

These are the types of things which can help sellers obtain more cash from the buyers. This is due to the fact that they really know how much this home really means to them. Any negotiating strategies and all discussions about the home are best left in private. Saying a few nice things about the home is not bad-just do not gush. Gushing=bad.

2. “That couch is hideous”

While the experience of buying a house can bring on a lot of stress, do not tell the sellers-or any real estate agent present-that they’ve poor taste in furniture or decor. Their style may not suit yours, but that is no reason to insult them. If they hear you bad-mouthing their curtains or rug, then they may just select another buyer.

3. “I can afford to spend X”

In spite of the fact that it is definitely a good idea for the prospective buyers to discover just how much they can afford, buyers should keep the information strictly between them and the Realtor when buying a house.

Prospective home buyers should not address with the seller or the seller’s agent anything concerning their ability to pay a full price offer or financing. This hinders the ability to negotiate the best price for the house. If you are asked, you should say that finding a home that is fairly priced is what matters to you more than the amount you can afford.

4. “I cannot wait to get rid of that”

Even if you are thinking that the home will be perfect once you get your hands on it, do not let on. If the new buyers are planning to remodel a house in which somebody raised their family and has many memories, the buyer should not say; that wall color is terrible and I cannot wait to repaint this place, or I cannot wait to tear that swing set down. The seller can simply reject their offer or come back asking for more cash upon hearing that somebody wants to completely remake the home where they made lifetime memories. Try making the experience of buying a house enjoyable for all.

5. “Why are you selling?”

Yes, when buying a house, you might want to find out why the sellers have decided to sell their house. Keep it to yourself! It is considered poor taste to ask, and it might just open a can of worms. You should never ask the sellers why they’re selling the property, there might be personal reasons such as job relocation or divorce or something worse- none of it is your business. Creating a possibly uncomfortable state of affairs will not help you down the road, in case a bidding war emerges.

6. “What’s it really like to live here?”

Sure, you may want to get the inside scoop when buying a house, however that does not mean that you should interrogate anyone. Do not ask the neighbors personal questions. You can talk to the neighbors and give them a chance to open up, but do not push if they are not talkative. If you end up moving into the neighborhood, do you want the first impression they have of to be that of a spy or a pest?

7. “You will never get that price!”

Although you may be thinking that you would not give them an X amount for the home, as a buyer it is best for you to keep your opinions and thoughts to yourself. Even if the buyer thinks that the house is highly priced, it might be within range of similar houses in the neighborhood. This leads us to our next point…

8. “I will give you [a very low-ball offer] for this home, what do you say?”

When looking to buy a house, do not ask your real estate agent to submit several low-ball offers. You should take your real estate agent’s advice when it comes to the pricing- because it is never wise to insult the person whose house you are trying to purchase and you do not want to appear as a not so serious buyer.

 

Tips To Buy Real Estate Below Market Value

It patently requires time, work and ability to get an incredible deal for land. Obviously getting profitable deal is one of the tasks of entire business. But here we will let you know how to make a profit on purchasing a property. Doing this obviously requires research, skilled transaction and complete dedication – still if one follows the given underneath techniques you can yield stunning achievement.

To be effective in Real Estate you need to know how to purchase land below the market value, and purchase properties that bode well. For this we will first let you know why individuals offer property below market value, what its real market worth is and afterward how you can purchase land below market value.

Why do individuals offer property below market value?

Nobody wishes to offer their property less than its value. If one is doing so then undoubtedly there must be some reason for that. In majority of the cases reason is time pressure. Choices can frequently be irrational and emotional in these circumstances. For Example:

– Facing budgetary issues.
– To share funds with legatee.
– Facing Foreclosure Problems
– Personal issues.
– Interested in another property.
– Migrating because of work issues.

Whenever you discover a dealer who is keen on Short Sale, it’s nothing less than a golden opportunity for you to confer the deal with the cost and contract terms in your favor.

In such cases, never be reluctant to make inquiries like: “What is the reason of sale?”; “For how long has the property been available in market?”; Knowing these details will give you a clear idea of how much room is there for negotiation due to which your deal will turn out to be simple.

What is its real market worth?

Market worth is the original cost at which a specific property will be sold in its present condition. The cost is determined by the business sector or at times it also relies on the interaction of a purchaser and dealer. Remember that it is not settled like the cost of an item at a retail shop. This makes land bargains at an exceptionally productive open door. There is only one way of finding the definite business sector estimation of a property if you are not an agent and that is by observing practically identical deals. You have to discover recent offers of comparative properties in surrounding areas for this. It is the most accurate way to do this on your own. Likewise the least demanding way to know the market value for this is to go for such service suppliers. They will take complete liability to provide you a beneficial deal.

Remember that if you are looking at a property that necessitates repairs then you need to get it in even lower cost else you aren’t purchasing underneath real market worth.

Approaches to purchase real estate below market value:

To purchase real estate most importantly get this clear that there are short sales below market value, there are Fair market deals, auctioned property and the off market properties that can be sold below market value. With a specific end goal to use benefits of purchasing real estate less than its market value, go for these properties.

Short Sales are a phenomenal hotspot for financial specialists. Short sales are possessed by private vender; however the vender has a commitment to pay the bank more than for the amount they are attempting to offer the home. With a specific end goal to sell the home, the bank needs to take consent to take less cash than they are owed. Truly, short sales take up to 6 months or even a year to close since sellers here don’t effectively hop onto a conclusion. They take their requisite time to settle on choice.

Fair market deals are homes claimed by a private vender who have reasonable play in the home selling decisions. They can offer it without including the bank in the basic leadership. It is harder to discover fair market deals in light of the fact that the merchant is generally not in a gigantic hurry to offer their home underneath market value. There are fewer situations where you can find a great deal on a fair market sale.

Numerous service providers go for a property that is never listed for sale since they expect that it might cost them not exactly genuine market worth and they could easily gain the benefit. These are off market properties, since they are not available to be purchased. It requires cash and investment to have the capacity to buy these sorts of speculation properties.

At the point when a property is dispossessed by a seller, so it’s obligatory for him to attempt and reclaim its misfortunes before promptly assuming responsibility of the property. That property is termed as auctioned property. This is the reason numerous homes are unloaded at the courthouse steps. So you should simply, determine when your local courthouse holds its auctions and grapple the most profitable deal from it as soon as possible.

In addition never let go the deals in which such terms are being used by the vender:

#Desperate Merchant
#Divorce
#Decreased Estate
#Distressed Property
#Induced Seller

Generally speaking, to figure out how to purchase real estate underneath market value all you need to do is a lot of work and sparing time in research, hence after adapting these techniques your deal can be extremely profitable.

 

Buy a New House With Credit

Buying a house is a dream come true for most of us. It is a practical and a financially wise decision as well. No wonder the real estate market is ever buzzing with activity this year. However, as much as we love the idea of buying a house, the high amount of money involved can make some of us weary about the process. The most basic step in buying a house is planning your budget. Based on income and savings, one can get an estimate of the price of house they can afford. A majority of home buyers look for financial assistance from banks or other lending institutions to purchase their house. In such cases, along with Income and savings, credit scores also play a huge role in deciding whether a loan can be extended to an individual, as well as the amount of loan. Real estate agents can also help you decide the budget and find a property that fits within it. Agents are also great resources to help find a lender who can clean up your credit score.

Check your Scores/Clean up your Credit Score

Credit scores are a way to measure the “credit-worthiness” of any individual i.e. whether the person will be able to pay back the loan on time. Your scores are based on your credit history, the number of credit lines and loans held by the individual, weather payments for those have been made on time, the amount of outstanding balance one is carrying on other loans and credit cards etc. So the first thing to know before you decide on a home is whether or not you have a good credit score or if you need to clean up your credit score. If you have been paying all your outstanding bills and installments on time, then you most likely should. It’s still always good idea to check, never assume.

Identify your weak spots

There are three main credit Bureaus in the US – Experian, Equifax and Trans-Union to review when you go to clean up your credit score. While they have some differences in the parameters on which they base their scores, the scores from all three bureaus are typically pretty close. You can get your credit report from one or all of the bureaus by paying a small fee. Review your report well, especially the section that talks about adverse accounts. This section lists down the accounts where you may have missed payments, defaulted etc. If there is a specific credit card where you have missed a payment more often than others, make a note of it. Similarly, check your average outstanding balance against your credit limit. If the ratio is too high, make a note. Also, check if any of the entries don’t add up since sometimes, even the Bureau can get their information wrong.

Correct some mistakes, undo others/Clean up your Credit Score

For the accounts identified where you have been missing timely payments, it is time to buckle up and make sure you begin paying your bills on time, which, will help clean up your credit score. As you get regular with your payments, your score will start improving over a period of few months. In case you have had one or two late payments, you can also call the company that has registered the late payment and request them to remove it from your credit record. Most companies willingly do this for those who missed the payment deadline once or at max, twice. Similarly, if you have too many open credit lines with small outstanding balances and can spare some money, then take the extra effort to pay all dues and close these credit lines.

Request a credit limit increase

If on some credit lines you have been regular with your payments but your ratio of outstanding balance to the credit limit is high, then a simple way to make this ratio look better is to request that your bank or financial institution increase your credit limit. However, remember that a credit limit increase only be accepted if you have displayed good payment behavior. Also, make sure to not exhaust the increased limit because remember, this limit extension is to reduce your ratio and increasing expenses will defeat the purpose. Both of these issues are crucial if you are looking to clean up your credit score.

Raise Disputes, if any

Lastly in your effort to clean up your credit score, if you have identified any entries that appear incorrect in your report, send a dispute letter to the bureau and provide them all information and documents to prove your case. This could take some time, but correcting records can help boost your score.

Improving scores can take some time and hence it is advisable to begin early. Even if you are not planning to buy a house right away, it is good to begin patiently working on your scores so that by the time you are ready, your scores are ready too.

 

Tips To Find Foreclosure Assistance

If you are facing foreclosure, it is important to know all your options. Many foreclosures are caused from job loss, unexpected medical bills, or divorce. Typically, these are once-in-a-lifetime occurrences; therefore, contacting your mortgage lender and informing them of your situation is vital to your credit as well as keeping your house. If you are facing any of the above mentioned financial issues, the following steps could help you avoid losing your house.

• Contact Your Mortgage Lender – If you are having problems making your mortgage payment, contact your lender immediately. The loss mitigation department will be able to assist you with options from refinancing, loan modification, or forbearance. Explain your situation, then follow-up with an email or letter thoroughly describing what has occurred that has caused a financial hardship and then send documentation to the lender to support your situation.

• Maintain Your Residence – Stay in your house. Most of the recent government assistance programs are all based on housing that is owner-occupied. Once you move out of your property, you will lose many protections issued by these recent laws.

• Contact an Approved Housing Counseling Agency – Contact the Department of Housing and Urban Development (HUD) and seek out a HUD approved advocate to act as a liaison between you and your mortgage lender. The housing counseling agency should be well-versed on all the government programs that may benefit you. The housing counselor should be knowledgeable on any private or local organizations which may offer assistance. Assistance from a HUD approved housing counselor should be free of charge.

If after talking to the housing counseling agency you may decide that your best option, due to your financial situation is to sell your property to avoid foreclosure; there are other options, which include: short sale, or deed in lieu. A short sale is when the mortgage holder accepts a lesser amount than is owed on the mortgage. This usually occurs when the mortgage is greater than the value of the property. It would be necessary to contact an experienced real estate agent who has successfully handled short sales in the past. A deed in lieu is when you voluntarily give back your property to the lender. If you choose this route, your credit will not be as damaged as if you went through a foreclosure; whereas, the benefit to the lender is that they will not have to go through the expense of foreclosing on the property.

In summary, the first step to take to avoid foreclosure is to contact your mortgage lender and thoroughly explain your financial hardship. Send a detailed follow-up email or letter to your lender with supporting documentation of your hardship. Second, seek out the assistance of a HUD approved housing counseling agency. Thoroughly explain your situation to the HUD approved counselor and cooperate by providing any documentation requested to support your situation. They should work on your behalf to help you save your home, or at a minimum help you minimize the damage to your credit.

 

When You Want Renting House During Foreclosure

One of the worst situations that a tenant can find themselves in is to be renting a house that is going into foreclosure. It’s an uncertain situation and may eventually see the tenant evicted through no fault of their own.

If you find yourself in this situation, you have a number of rights that you should be aware of.

Will I Be Evicted?

Before 2009 the vast majority of tenants would lose their lease once the home entered into foreclosure, leaving them in a situation where they had to find somewhere else to live.

However, in 2009 the Protecting Tenants at Foreclosure Act changed so that any tenant in a foreclosed property can maintain their lease and continue to live there, assuming the new owner doesn’t want to use the home for themselves.

While it is certainly not ideal, you will find that many people purchase foreclosed properties as an investment, rather than as a place to live themselves. That means many will be happy to keep you where you are, as they will now be receiving monthly money without having to put any work in.

Bear in mind that this differs slightly for tenants who are on a rolling monthly contract. In these cases the tenant will be given 90 days to vacate the property once ownership is transferred, unless they can reach an agreement with the new property owner.

What About Maintenance?

This is where the issue becomes a little stickier. Before a foreclosed property is sold to a new, individual owner it will usually become the property of a bank or mortgage provider for a period of time. There is no determining what this period of time is going to be, but it can be detrimental to maintenance efforts on the house.

A bank is not inclined to make sure everything in the house is working as you need it to, and your old landlord will no longer care once the house enters foreclosure. This means that any maintenance issues are likely to go neglected until there is a new property owner who is happy to allow you to keep renting.

Legal Action

In some cases, the tenant will also have the option of pursuing legal action against their former landlord, particularly if the landlord failed to inform them that the property was being foreclosed on.

In a legal sense, this failure to provide information essentially amounts to fraud, which means that the tenant can sue for monetary damages, such as any costs associated with the tenant being forced to move and any rent increases that they have had to endure in the process.

Unfortunately, if it has gotten this far then it is likely that you will have had to move out of the rented property, which is not an ideal situation.

The risk of foreclosure is something that should be disclosed, if it is a possibility, before the tenant ever signs the lease. Otherwise, they are having vital information withheld from them, which means their decision is less informed.