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Is Your Home Under Water?
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IS YOUR HOME UNDER WATER? ARE YOU PLAYING THE WAITING GAME DECIDING WHAT TO DO? YOU ARE NOT THE ONLY ONE! Many homeowners who are having financial difficulty continue to weigh their options. Sell it in a short-sale? Let the lender foreclose? Negotiate a Deed-in-Lieu of Foreclosure? Keep fighting for a modification? Here’s something you need to know… Currently, there are laws that provide a very generous amnesty for the tax implications of short selling an owner occupied home, both in California and on the Federal level. These laws “sunset” after December 31, 2012, and no one knows if they will be reenacted. Many industry experts believe they will not, but nobody has a reliable, accurate crystal ball so we don’t know for sure. Whether your home is foreclosed on or sold via short-sale, you will receive a 1099 for the amount of the discharged debt. For example, if your home sells for $100,000 less than you owe, the lender will send you a 1099 for that amount. Normally, that $100,000 would be considered taxable income on your state and federal taxes and you could end up owing thousands of dollars to the IRS and Franchise Tax Board, after already having suffered financial hardship. Thankfully, that scenario can be avoided by making sure your short-sale or foreclosure is completed before the sunset date. While you really have no control over your lender’s foreclosure timeline, you do have a measure of control over when a short-sale can be completed. It is best to get started sooner rather than later, as short-sales can take months and months to complete. I encourage you to consult your tax professional, a qualified real estate attorney, and talk to us for free before you make this important decision. For an evaluation of what it would take to short sell your home and to learn all the facts give me a call. I would be glad to estimate the value and discuss all of your potential options. |
FHA has a Loan Product for Buyers AND HOMEOWNERS!
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Everyone has heard of FHA and most know the advantages of obtaining FHA financing for home purchases. These loans are currently the most used purchase loans in the United States. But for those who don't know or don't remember, here is a refresher: The Federal Housing Administration, generally known as "FHA", provides mortgage insurance on loans made by FHA-approved lenders throughout the United States. It is the largest insurer of mortgages in the world; insuring over 34 million properties since its inception in 1934. FHA loans are a great option for borrowers that do not have a lot of cash on hand for a down payment and may need some flexibility in qualification guidelines. FHA products are backed by investors who have certain qualification requirements of their own. These are referred to as "investor overlays" below. Features include: low 3.5% down payment most of your closing costs and fees can be included in the loan low monthly mortgage insurance no maximum income/earning limitations (there are investor overlays to this guideline) no cash reserves if loan meets FHA guidelines minimum FICO score 620 (with investor overlays) no landlord rating required gifts are acceptable seller credits are allowed non-occupant co-signers okay to help qualify fixed rate and ARM loans available
If you already own your home I'll bet you're thinking "So what. Why should I care about FHA right now?" Here's why: FHA also has a product dubbed "203(k) Loans". 203(k) loan funds can be used for purchase OR REFINANCE and include rehab/remodel money. Also, the loan amount is based on the value AFTER the rehab/remodel. Features include: FHA guidelines apply opportunity to borrow against the value of the home after improvements low down payment requirements for purchase transactions flexible credit qualifying fixed-rate and adjustable-rate mortgages up to 30-year terms fully assumable loans to qualified borrowers owner-occupied 1-4 unit properties, PUDs, condos and REO properties lower initial monthly payments with optional temporary interest rate buy down
Eligible properties include:
Virtually any kind of improvement is eligible provided it becomes a permanent part of the real property and adds value, for instance:
additions to the structure kitchen or bath remodels finished basement or attic patios, decks or terraces roofing and landscaping safety, energy efficiency and electrical upgrades handicapped accessibility improvements
Luxury items are not eligible:
swimming pools (however, repair to an existing pool may be possible), hot tubs, tennis courts, gazebos, barbecue pits, saunas or alterations to support commercial use
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The True Value of a Home Warranty
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A Home Warranty is a Small Investment that can Save you Money! The average home warranty policy costs around $300. For a little extra money, you can also purchase coverage riders for things like pools and HVAC systems. With a home warranty, if something that is covered breaks, instead of paying the repair service for the service call plus repairs, you pay only the nominal service call fee charged by the Home Warranty Company (typically between $50 - $100). |
Whether it’s a brand new home or an old fixer, a Home Inspection is an absolute must. A seasoned home inspector will give you a report that provides a clear picture of the condition of the property. For a fixer, a home inspection will help you determine the costs of repairs. On a new home, a home inspection will ensure the builder’s “pick-up list” (unfinished details) is complete. A home inspection will also give you a “heads-up” on future maintenance needs. |
There are many ways to be “Green”. So many, in fact, that the internet has hundreds of resources with tips on how to be Green and save money doing it. Try these for a start: |
Shop Around for Title Insurance
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The California Land Title Association (CLTA) created a website which allows the public to check rates for 83 title companies, www.clta.titlewizard.com. Rates vary as much as $500 on a $500,000 loan. |
3 Simple Steps to Start Buying a Home
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1. Check your Credit Report – everyone is entitled to one free copy of their credit report every year from each of the credit reporting agencies: Experian, Equifax and Trans Union. You can view and print all 3 of your credit reports for free at www.annualcreditreport.com 2. Call your Lender – A few minutes on the phone with a mortgage broker or local bank will help you determine how much you can spend on your new home. 3. Get your MLS Portal (call us…it’s free!) - Get familiar with the market so you can recognize a good deal when it comes along. Do not hesitate to call us if you would like assistance with any of these steps. Once these 3 steps are done, you will have all the tools you need. You are on your way to being a homeowner! |
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