How to avoid foreclosure

What happens once I miss my mortgage payments?

forclosuedForeclosure might occur. This is often the legal means your lender will use to repossess (take over) your home. When this happens, you need to move out of your house.

If your property is value but the whole quantity you owe on your mortgage loan, a deficiency judgment may be pursued. If that happens, you not solely lose your home, you furthermore might would owe housing and urban development an extra quantity. Both foreclosures and deficiency judgments might seriously affect your ability to qualify for credit within the future. So you should avoid legal proceeding if attainable.

What should I do?

1-Don’t ignore the letters from your lender. If you’re having issues creating your payments,

Call or write to your lender’s loss mitigation department immediately. Justify your state of affairs. Be

Prepared to supply them with money info, such as your monthly financial gain and expenses. While not this information, they’ll not be ready to facilitate.

  1. Keep in your home for currently. You will not qualify for assistance if you abandon your property.
  1. Contact a HUD-approved housing subject matter agency. Call 1-800-569-4287 or TDD 1-800-877-8339 for the housing subject matter agency nearest you. These agencies are valuable resources. They often have info on services and programs offered by government agencies as well as personal and community organizations that would help you. The housing subject matter agency may additionally provide credit subject matter. These services are sometimes freed from charge.

What are my alternatives?

Special forbearance. Your loaner could also be ready to prepare a repayment set up supported your money state of affairs and will even give for a short lived reduction or suspension of your payments. You will qualify for this if you’ve got recently experienced a discount in financial gain or a rise in living expenses.

You need to furnish info to your loaner to show that you simply would be ready to meet the wants of the new payment set up.
Mortgage modification. You may be ready to finance the debt and/or extend the term of your real estate loan. This may assist you catch up by reducing the monthly payments to a more cost-effective level. You will qualify if you’ve got recovered from a money downside and may afford the new payment quantity.
Partial claim. Your loaner could also be ready to work with you to obtain a one-time payment from the FHA-insurance fund to bring your mortgage current.

You may qualify if:

  1. Your loan is a minimum of four months delinquent however no a lot of than twelve months delinquent;
  1. You’re ready to begin creating full mortgage payments. When your loaner files a partial claim, the U.S.Department of housing and concrete development can pay your loaner the quantity necessary to bring your mortgage current. You need to execute a certificate of indebtedness, and a lien are going to be placed on your property till the speech act Note is paid fully. The certificate of indebtedness is interest-free and is due once you pay off the primary mortgage or once you sell the property.

Pre-foreclosure sale. This may enable you to avoid foreclosure by marketing your property for associate degree quantity but the amount necessary to pay off your real estate loan.

You may qualify if:

  1. The loan is a minimum of a pair of months delinquent;
  2. You’re ready to sell your house at intervals three to five months; and
  3. A replacement appraisal (that your loaner can obtain) shows that the worth of your home meets housing and urban development program guidelines.

Deed-in-lieu of legal proceeding. As a final resort, you may be able to voluntarily “give back” your property to the loaner. This won’t save your house, however it’s not as damaging to your credit rating as a legal proceeding. You can qualify if:

  1. You’re in default and do not qualify for any of the opposite options;
  2. Your makes an attempt at marketing the house before legal proceeding were unsuccessful; and
  3. You do not have another bureau mortgage in default.

How do I know if I qualify for any of those alternatives?

Your loaner can confirm if you qualify for any of the alternatives. A housing subject matter agency can even assist you determine that, if any, of those choices might meet your needs and conjointly assist you in interacting along with your loaner. Call 1-800-569-4287 or TDD 1-800-877-8339.

Should i bear in mind of anything else?

Yes. Watch out for scams! Solutions that sound too straightforward or too smart to be true sometimes are. If you are marketing your home while not skilled steerage, watch out for consumers who try and rush you thru the method. Sadly, there are folks that might try and profit of your financial issue. Be particularly awake to the following:
Final output five/17/2002 12:13 pm page 5 equity skimming. During this variety of scam, a “buyer”

Approaches you, providing to induce you out of economic hassle by promising to pay off your mortgage or offer you a sum of cash once the property is sold-out. The “buyer” may counsel that you simply move out quickly and deed the property to him or her. The “buyer” then collects rent for A time, doesn’t create any mortgage payments, and allows the loaner to foreclose.

Remember, sign language over your deed to some other person doesn’t essentially relieve you of your obligation on your loan. Phony subject matter agencies. Some team’s line of work themselves “counseling agencies” might approach you and offer to perform sure services for a fee. These might well be services you may do for yourself for complimentary, like negotiating a new payment set up along with your loaner, or following a

Pre-foreclosure sale. If you’ve got any doubt concerning paying for such services, decision a HUD approved housing subject matter agency at 1-800-569-4287 or TDD 1-800-877-8339.

Do this before you pay anyone or sign something.

Are there any precautions i will take?

Here are many precautions that ought to assist you avoid being “taken” by a scam artist:

  1. Do not sign any papers you don’t absolutely perceive.
  2. Make certain you get all “promises” in writing.
  3. Watch out for any contract of sale or loan assumption wherever you are not formally discharged from liability for your mortgage debt.
  4. Confer with a professional person or your mortgage company before entering into any deal involving your home.
  5. If you’re marketing the house yourself to avoid legal proceeding, check to check if there are any complaints against the prospective emptor. You’ll contact your state’s lawyer

Final output 5/17/2002 12:13 pm page half-dozen general, the state land commission, or the native

District attorney’s client fraud unit for this sort of info.

What are the most points I should remember?

  1. Do not lose your home and injury your credit history.
  2. Decision or write your mortgage loaner in real time and be honest concerning your money state of affairs.
  3. Keep in your home to create positive you qualify for help.
  4. Prepare a meeting with a HUD-approved housing counselor to explore your choices at 1-800-569-4287
  5. Collaborate with the counselor or loaner making an attempt to assist you.
  6. Explore each different to stay your home.
  7. Watch out for scams.
  8. Don’t sign something you do not perceive. And keep in mind that sign language over the deed to some other person doesn’t necessarily relieve you of your loan obligation.

Act now. Delaying cannot help. If you are doing nothing, you will lose your home and your smart credit rating.

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A Tip On How To Get Offers When Showing Your House

You are in the process of trying to sell your house and have your marketing up and running. So, how do you convert callers into offers? Here is one method.

A Tip On How To Get Offers When Showing Your House

Once you have decided to sell your home, there are a couple of steps you have to take. The first is to get the home ready to show by doing repairs, landscaping and so on. Once you are ready to go, you have to start marketing the home. Assuming you have done all of this, the house is in good shape and you are competitively priced, you should start getting calls from potential buyers. These calls then turn into appointments and buyers come to see your home.

Offer on your houseAt this point, you probably expect that I will start writing about how to negotiate or accept offers. Wrong. The next step in the process is often one of frustration. The frustration arises from wishy washy buyers. They come and see the home, but leave without making an offer. They may come back a couple of times, but they simply never get around to doing the deed as they say. Simply put, this is because you have failed to address the issue of motivation.

Buyers need to be motivated to take action. The more motivated they are, the faster they will move. For instance, consider the holiday shopping season. Nobody, and I mean nobody, is out browsing in the malls. Why? The buyers are highly motivated to buy because there is a deadline and they probably have more than a few people to shop for. Simply put, they are highly motivated to do the deed.

Returning to our scenario above, what motivation do the buyers have to make an offer? Do they feel any pressure to do so? Unless there is something particular to their personal situation, the answer is that they do not. You must provide the motivation. Here is how.

One of the complaints of sellers is that they feel like they are constantly showing their homes to potential buyers without getting an offer. They may show the property three, four or even ten times a week. If this is your situation, you are doing it wrong.

The way to motivate buyers to make an offer on your home is to show it only once a week or two weeks if the market is slow. Set aside an hour or so on a particular day and make all the potential buyers come at the same time. By putting buyers together, you create the motivation that simply does not come with individual showings. In such situations, buyers are much less likely to be wishy washy. If they like the property, they inherently worry about one of the other buyers making an offer. You now have motivation and a perceived time limit.

If you have are getting interest in your property, but no offers, give this a try. You might be shocked how much of a difference it makes.

 

 

Does Your House Pass the “Smell Test?”

Smell Free houseWhen potential buyers come to look at your house, they’re not only LOOKING, but they’re also SNIFFING, either consciously or unconsciously. When we live in a house, we tend to get used to the way it smells and don’t always notice when something is a little…stinky. But any obnoxious odors will be immediately apparent to a first-time visitor. So before you show your house, take a sniff or two, and then take these steps to de-odorize.

  1. Pets. Dirty litter boxes and old “accident” stains are the obvious culprits here. Keep Kitty’s litter box scrupulously clean at all times, and consider having your carpet professionally cleaned by someone who is experienced with pet stains. Don’t forget that many people are allergic to cats, so make sure your furniture and carpet are vacuumed frequently. If possible, think about keeping your cat or other pets confined to a certain area of the house while your house is listed. If you’re thinking of getting a cat or other pet, wait until AFTER you’ve moved.
  1. Cooking. We’ve all been told that we should eat more fish, but until your house sells, eat that fish at a restaurant. Strong odors from cooking fish hang around and permeate the house. Cabbage, onions and garlic are notorious offenders, too. Throwing a few lemon slices in some boiling water or running lemon peel through the garbage disposal can help clear the air. And remember to take out your kitchen garbage as often as possible.
  1. Cigarettes. Smoking easily drops the value of a house by 30% or more. Smoke gets into the drywall, carpets, furniture, and drapes, and it is very difficult to remove. If you or a family member smokes, stop smoking inside the house as soon as you decide to sell. Paint the interior, and either shampoo the rugs or replace them. If weather permits, keep the windows open to help air out the house.

Follow the above steps, and your home will not only LOOK good, it will SMELL good. A fresh-smelling, odor-free house is much more appealing than a stinky one, and much more likely to sell at the price you want.

Deciding on a Price for Your Home

Pricing house to sellWhen it comes time to put your house on the market, pricing can make or break your sale. If you overprice your home, you risk watching it languish on the market, but under-pricing it means minimizing your investment. The starting point for pricing should be based on recent sales in the neighborhood, not on personal attachment. Regardless of what you think your home is worth, the pricing should be based on market value – this is why it’s important to find a good real estate agent who is familiar with the area. He or she will start by looking at what other comparable houses in your area have sold for. This is called a comparative market analysis (CMA).

Another important consideration is the market. To be safe you want to allow yourself enough wiggle room to come down in negotiations, but if it’s a buyers’ market you will have to do more to make your home stand out. Pricing your home below the competition should ensure multiple offers, thus driving up the selling price. Other tactics include being flexible around financing options and offering incentives. In any case, you want to price your home low enough that you will get traffic through – the first three weeks are important. If the house sits longer than three weeks perspective buyers may assume something’s wrong with it.

In a seller’s market it’s safe to add 10 per cent to the last comparable sale in your neighborhood and in a balanced market you may aim to add an amount based on the last comparable sale plus the average market increase calculated over the time since that sale.

Remember, pricing your house is as much an art as it is a science. In the end the price is important, but marketing and staging your home plays a vital role as well. A good realtor can guide you through this process and help you get the best price for your house.

Creative Real Estate Financing

Do the creative real estate financing techniques you hear about really work? Yes and no. They likely have all worked somewhere for someone at least once. The important point is to understand the principles involved, so you can find your own creative ways to invest in real estate. Here are ten methods to get you thinking.

  1. Use hard money lenders. Ask around or find these online. These lenders specialize in short-term loans at high interest. Typically, you use this type of financing for a “fix and flip.” You can get the money fast, and if you make $30,000 on a project, who cares if you paid $10,000 interest in six months?
  1. No-doc or low-doc loans. With these loans, no (or low) documentation of your income or credit is required. You can find banks that do these online now. You’ll only be able to borrow 70% to 80% of the purchase price or property value. However, if you have 10% in cash, you might be able to borrow the other 10% or 20% from a friend or the seller.
  1. Seller financing help. Sometimes a bank will loan you 90%, and allow the seller to take back a second mortgage from you for 5%, leaving you needing only 5% for a down payment.
  1. Land contract or “contract for sale.” Called other names as well, this just means the seller lets you make payments, and delivers the title upon payment in full. I sold a rental this way for $1,000 down, because I wanted the 9% interest, and the higher price I got.
  1. Credit card advances. Suppose a seller will take $10,000 down on a fixer-upper that you expect to make $20,000 on. Why not use credit cards? If your card limits allow for repair money too, this is a true 0-down deal for you, and if you turn the project in six months, you will have paid maybe $1,000 or $2,000 in interest on an 18% credit card. Don’t let $1,000 get in the way of making $20,000.
  1. Use your retirement accounts. The laws are pretty complex in this area, but you can check with a tax attorney to see how you might borrow from your own retirement account to finance real estate investments.
  1. Borrow from friends and family. If you go this route, keep it all business. In any cae, loaning you money at 7% isn’t a gift if their money is getting 2% in the bank.
  1. Use real estate note buyers. Suppose the seller needs cash. He raises the price, and sells to you for $100,000 with no money down, taking back two mortgages from you for $90,000 and $10,000. He arranged (or you did) for a note buyer to pay him $80,000 cash for the first mortgage at closing, getting him the cash he wanted. You pay two payments now, one to each note holder, but you got in with no money down.
  1. Borrow on another property. If you take out a home equity loan for a vacation, and then forget to use it for that, you can later use the money for the down payment on an investment property, without violating the rules of the bank that gives you the primary mortgage. In other words, you got in with no cash of your own.
  1. Start partnerships. For bigger projects, you could arrange for five investors to each put money into a partnership, with your share being the management responsibility instead of cash.

Remember, these ten creative real estate financing techniques are just to get you started.

Clean Home, Easy Sale

clean home, easy sellOne of the biggest problems people run into when selling their home is the process of preparing it for sale. Many homes are simply places where we keep the accumulated treasures of the years. Are you a clutter-bug, a pack-rat? It’s OK, we all are to some degree. When preparing a home for sale, we need to be mindful of our “stuff.” The best way to begin this process is to take a quick walk through your home. Make a list of everything that you have not used in the past 3 months, 6 months? Now, and here is the hard part. Get rid of it. Seem a bit extreme? It might, but things that you have not used in half a year are not likely to get used in the future. Remember we are trying to get rid of some stuff so that people can see the house, not what’s in it.

 

There is a common line of thought that home buyers want to see the “personality” of the homes current owners. This is not true. Buyers want to be able to see their belongings in the home. They want to put their personality into it to see if they could see themselves living there. A backlog of your stuff will get in the way of them doing this. Go through every room in turn and remove the clutter! This includes the closets, shelves and cupboards. Also remove excess furniture if the room seems too crowded. Here is another important thing to remember, don’t put all this stuff in the garage! Buyers will go through the garage like any other room in your home. Hire a storage locker if it is really necessary. Aside from that, use this as an opportunity to rid yourself of those things that you never use.

 

The minimalist approach is a good thing to utilize when showing your home. The lack of personal effects will make it easier for buyers to place themselves in your home. This will also make the moving process easier on you. With less things to pack when moving day comes, you can dedicate more time to creating your perfect space in your new home.

 

 

Choosing a Real Estate Agent

tipThe ideal agent is not always the one with the most sales under his or her belt, or the most years on the job. The ideal agent is one who listens to you, is easy to get along with, and has the tools and skills to address your unique situation.

Every home buyer is different. Some have credit issues. Some are buying from out of state. Some need help selling their current home in addition to buying a new one. Just as buyers have different needs, real estate agents have different skills and specialties.

Here’s how to find the agent who’s right for you:
  1. Ask friends and family for agent referrals.

Nobody knows you as well as your friends and family do. So they’re often in the best position to recommend an agent who is well-suited for your needs. You can also trust a referral from friends or family more than one that comes from a stranger.

  1. Talk to multiple agents.

I once saw a statistic that 84% of home buyers choose the first real estate agent they contact. This means one of two things. Either most people are choosing wisely the first time, or they’re just rushing into things without shopping around. Probably a little of both.

You don’t have to exhaust yourself interviewing agent after agent, but at least talk with two or three to see who you’re most comfortable with (which leads to the next point).

  1. Consider the vibe factor.

Professional expertise is an important criterion when choosing a real estate agent. But interpersonal skills are equally important. After all, you’ll be working with this person anywhere from 2 to 12 months, so it helps to get along with them. We all have unique personalities, and that’s the way it should be. But when working with someone professionally, if helps if their personality “meshes” well with your own.

  1. Ask how they hunt.

When deciding on a real estate agent, ask how they search for homes. Some agents have their own preferred listings that they favor. But you want what’s best for you, not what’s best for your agent. You’re paying them, right? So make sure the agent is willing to search high and low to find the best home for you. That includes using the Multiple Listing Service (MLS) as well as their own personal network.

  1. Read paperwork carefully.

This advice is heavily used for a reason. It’s critical that you examine all documents during the home buying process, and that includes your agent agreement. At some point during the relationship, your agent will probably ask you to sign an agent agreement. Basically, it just means that if the agent shows you a particular property, your purchase of the property should be credited to that agent. In most cases it’s a simple, standard document – just be sure to read it carefully and ask questions.

 

Checklist for Buying a Home

Buying a home can be one of the best feelings in the world. Nothing beats that feeling of security and satisfaction when you open the door to a new home and are happy with your purchase. The question is, how can you best ensure that feeling is going to happen? There are a lot of pitfalls in the real estate world and naturally you want to be able to avoid them and end up with a great home. Here are some great tips on how to streamline your home purchase and keep those little headaches from cropping up.

Enough cannot be said about being financially secure and aware. If you spend some time organizing your finances before making an offer the process becomes much less stressful. Take some time and research your credit history and find out if there are any outstanding issues or problems and get them taken care of. This can negatively affect your chances of getting a good mortgage, so it’s in your best interest to clear any credit issues up before the buying process starts. Most mortgage companies will offer you a pre-qualification, now this is nice to have but you are better off to take it a step further. Obtain a pre-approval for your mortgage. The pre-approval gives you an absolute number to work with. Not only does this make shopping for a home easier on you, but it gives you a significant amount of leverage in the actual sale.

The next logical step is to begin working with your realtor on finding homes that suit your needs. Let you realtor know what things you cannot do without and those things that you would like and let them come up with a list of fitting homes. During this time you can also research the available homes in your chosen area on the internet and find places that appeal to you. With this ammunition you and you agent should be able to view homes and properties with confidence and easily find a place that is agreeable to your needs, wants, and wallet.

Once you have located the perfect property, have an inspection done. This step cannot be stressed enough. Be wary of sellers who are willing to sell to others on the “no inspection” clause. This is never a good thing and much of the time they don’t want an inspection done for a reason. The inspection is extremely important step in ensuring your protection as the new owner. After all, this is going to be home right? Don’t ever sell yourself short

 

Cheap Houses For Sale

Reduced price homesWe found cheap houses for sale all over the country. My wife Ana and I were on a seven-week drive around the country. It was a vacation, but we looked at houses too, and bought one in a great little town in the mountains of western Montana. It cost $17,500, and after $2000 to fix it up, we lived there for several months before selling it for $28,000.

We loved Anaconda. Where else can you fly fish, go to a three-dollar movie  in a beautiful old art-deco theater (the 5th most beautiful in the country, according to the Smithsonian), drop some nickles in a slot machine, eat at a fine restaurant, stop by the bar for a dollar beer, and buy a house for  under $30,000 – all within a four block area! There are good schools and churches, a library with fast internet service, and wildlife (including bears) a few hundred yards from downtown.

Why Are There Cheap Houses For Sale?

There are cheap houses in Anaconda, and nearby Butte because there aren’t many good jobs. I easily found jobs in Anaconda – but not good ones. This explains why people left the area in the 80’s, after the mines and smelters closed.

Thirteen percent of the “housing units” in Anaconda are vacant, according to the 2000 U.S. census. This has driven down the home prices dramatically. Since it still has all the basic amenities, is cleaner now, and is slowly recovering, it’s a great place to retire to or to move to if you have an internet or other non-location-based business.

A poor local economy is the reason you can buy cheap houses in many parts of the country. These are towns that have seen troubled times, but are often recovering, sometimes with good reasons. Anaconda, for example, now has, in addition to it’s beautiful mountain scenery, a ski resort and a Jack Nicholas golf course. Houses cost four times as much an hour in any direction, and those prices are bound to reach Anaconda eventually.

Cheap Houses You Don’t Want To Buy

There are towns like the one in South Dakota where we stopped for lunch one day. A bulletin board had ads for cheap houses for sale by desperate people trying not to be the last to leave town. There was a photo of a beautiful old five-bedroom farmhouse for $11,000. As we ate, we looked up the deserted street and noticed that most of the buildings were boarded-up. This was a dying town, with nothing to help revive it. A free house wouldn’t be a good enough reason to move here.

Cheap House For Sale – Our Criteria

There are many wonderful towns, from Florida to Oregon, where there are cheap houses for sale. After our Montana experience, we started a website about them. What does a town need in order to make our list? The criteria are certainly subjective, but include at least the following:

  1. Population of 4,000 to 80,000.
  2. Decent library.
  3. Good grocery store.
  4. Movie theatre.
  5. At least six houses for sale under $50,000.
  6. The town has a good “feel” to it.

After much research, we found a number of towns that met our criteria, including some with homes for under $30,000. There really are nice towns out there where you can find cheap houses for sale.

Cheap Homes – Five Ways To Save Thousands

How do you find cheap homes? There are too many ways to list here, but there are five basic principles to learn. Understand these, and you can save thousands of dollars on your next home.

Cheap Homes Are In Cheap Towns

Yes, there are still beautiful towns in this country where you can see a good movie, put the kids in a good school, go shopping, enjoy nearby natural beauty, and buy homes for under fifty thousand dollars. My wife and I bought a beautiful little home with hardwood floors, a full carpeted basement, and a garage, in a pretty mountain town, for $17,500, in 2002. You can still get homes for under $35,000 there.

What you can’t get very easily there, is a good job. These towns with the cheapest homes usually have a bad job situation. They are great places to retire to, or to move to if you have a business or profession that isn’t location-dependent. Writers and internet entrepreneurs are beginning to discover them. Of course, if you’ve already determined where you’ll be living, or need a town with high-paying jobs, you can skip this idea.

Some Homes Are Just Cheaper

Another way to save when buying a home is to find a less expensive alternative that still fits your needs. This can mean buying in the inexpensive parts of town, or buying the inexpensive types of homes. Don’t set your mind on one type of home or one neighborhood before you know what all the alternatives are.

This doesn’t mean buying a cheap dump to save money, or buying in a dangerous part of town. It is more about a philosophy of defining your true needs so you can find the least expensive way to meet them. You may be surprised at what is available for less.

You Can Offer Less

No matter what you buy, you can save a lot if you know a few basic negotiating techniques. Is it worth a few minutes reading and an hour or two of practice to save thousands of dollars? Anyone can learn a few simple negotiating techniques that are used by the masters of negotiation. Somewhere, every day, people get cheap homes come through good negotiating.

Financing Can Make Homes Cheaper

You can pay the full asking price on a home and still spend thousands less than another person might. It isn’t just price, but financing too that makes a home affordable. Pay a lower interest rate, and you can save many thousands of dollars. You can pay low or no loan fees, avoid mortgage insurance, save on appraisals, and more.

Save Money On Everything Else

Start learning the insider secrets to saving money at each step in the home buying process. You can learn tricks like how to use a walk-through inspection list to present with your low offer. You can learn ways to get cheaper inspections, pay lower taxes, pay less for homeowners insurance, and save on closing costs. I even financed a home without an appraisal once. There is more to buying cheap homes than just getting a low price.