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Upside-down in your home? You may be able to qualify to buy another.

Many upside-down homeowners have found a way to take advantage of this incredible buyer’s market!

I talk to people daily who express frustration about the fact that they must continue to make payments on a home that is significantly upside-down. They watch as their neighbors abandon properties, either due to hardship, or because they are simply sick of paying for a home that will possibly never be worth what it once was. Then they watch helplessly as new buyers come in and buy the abandoned home at a deep discount, further submarining their property value. 

So, why don’t they follow suit? For many, walking away from their responsibility is not something they can comfortably do.

What is an upside-down homeowner to do?

Many homeowners decide that the best strategy is to call their bank and try a loan modification. Unfortunately, the reality is that 96% of loan modifications fail. Typically, as a condition of being considered for a loan modification, they are told by their lender that they must miss payments, which causes havoc to their credit score. And in many cases where the modification is granted, the new payment ends up being higher due to the fact that the accumulation of missed payments is lopped onto the new loan balance.

You may be like these frustrated homeowners who don’t want to ruin their credit by defaulting on a loan. You may not qualify for a short sale. Or you may not feel right about walking away. However, you wish you could take advantage of the best buying market in decades.

Guess what? You may be able to!

What?! I can buy an investment property?

Quite possibly. I had lunch today with my favorite lender, Roland Benson, with iMortgage (916) 768-1578. He said that while most large banks will not fund this type of loan, iMortgage is a direct lender and does NOT impose extra restrictions. Because of this freedom, Roland’s company has success getting these loans funded and closed!

Here’s how it works:

1. Find a property you would like to buy. If you don’t have an agent, I can help you. Contact me.
2. Contact Roland Benson with iMortgage (916) 768-1578.
3. Most properties in this market can cover their own mortgages through rental income.
4. As long as your credit is intact (i.e., you have not missed payments by attempting a no-win loan modification), you are likely good to go.

Many people have no idea that this is an option. I sure didn’t until I talked to Roland today. Take advantage of this great market and go buy an investment property today!

Waiting Period after Loan Modification same as Foreclosure or Short Sale?

Most lenders insist borrowers who have received a Loan Modification (even with a simple interest rate change) wait 3 Years to be able to qualify for a loan, just as those who have had either a Foreclosure or Short Sale.

Here is an example:

“Joe” and “Jane” have owned their home for 10 years. They aren’t upside-down like many homeowners and they have never missed a payment. They decide it’s wise to take advantage of the improving interest rates, and so they contact their lender and receive loan modification with an interest rate reduction.

A year later they decide they have outgrown their home and start looking into purchasing a new home. According to Fannie Mae Guidelines, if a homeowner works with his or her lender to modify their loan with a lower interest rate, this Loan Modification is interpreted to be a “Significant Adverse Event,” and is then lumped in with and considered to be as derogatory as Foreclosure or Short Sale.

What does this mean?

Joe and Jane, though in good standing on their loan in every other way, will be turned down by the bulk of lenders based upon this little known fact, and will be forced to wait 3 full years before they can qualify for a loan.

It’s important to choose a lender who looks a little deeper.

According to Roland Benson with iMortgage, “Interest rate change should not be considered a significant adverse event.   However, lenders are declining borrowers because their credit (past or current mortgage) contains a clause stating “modified.”   Just like the hundreds of other pitfalls, borrowers get lumped into this category when they chose the wrong lender.”

It’s important to use a company that thinks outside-the-box, and who will will dig deeper and uncover that the “modified” loan was only a simple interest rate reduction (no late or missed payments) and approve an otherwise well qualified buyer. I have found that Roland Benson at iMortgage is one who truly cares and has success finding ways to help homebuyers who have been turned down by other lenders, and who also consistently closes on time.

Contact me for more information and to get you in touch with Roland Benson.

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Great Deals on HUD Homes for Sale in Auburn, Roseville, Rocklin, Lincoln, CA

Great bargains on FHA owned, or HUD Homes, such as this one on Montrose Lane in Lincoln CA, will be hitting the market starting this quarter, and peaking by the end of the year.

An increase in FHA loan defaults will give rise to the release of 178,000 HUD owned properties nationwide. Of those, 40,000 are said to be in the Northern California region, including homes for sale in Auburn, CA, Roseville, Rocklin, Lincoln, Sacramento, and surrounding areas.

What is a HUD home?

A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.

Who can buy a HUD home?

Owner occupants and investors can buy HUD homes. Priority is given to owner occupants during the initial listing period.

How can I buy a HUD home?

Only real estate agents with registered brokerages can make offers on HUD homes on behalf of their clients. Contact me if you would like more information on making an offer on a HUD home. The process is quite specific, and you will want an experienced HUD agent on your side.

What about financing?

FHA loans can be used to purchase HUD homes. HUD will pay for a section one pest clearance if the buyer finances using an FHA loan. Some of the benefits of an FHA loan are down payments as low as 3.5% and low closing costs. Buyers must meet loan qualifications. For more information, contact a qualified FHA lender such as Roland Benson at 916-768-1578.

Other types of financing, such as a conventional loan, can also be used to purchase HUD homes, as well as cash.

What is the Neighbor Next Door Program?

HUD’s Good Neighbor Next Door initiative is designed to encourage renewal of revitalization areas by providing law enforcement officers, firefighters, emergency medical technicians and teachers an opportunity to purchase homes in these communities. HUD provides a substantial incentive in the form of a fifty percent discount off the list price of eligible properties. Buyer’s paticipating in the Good Neighbor Next Door program must live in the home for 36 months to qualify for the discount.

For more information, visit the Official HUD Website.

When can I buy a home after Bankruptcy, Foreclosure or Short Sale?

Here is a quick guide for required waiting periods after going through Bankruptcy, Foreclosure or Short Sale

The waiting periods for each type of distress situation are dependent upon the type of loan you will be pursuing going forward.

For Conventional Loans:

• Chapter 7 Bankruptcy – 4 year waiting period from the discharge/dismissal date
• Chapter 13 Bankruptcy – 2 year waiting period from the discharge date, or 4 years from the dismissal date
• Multiple Bankruptcies – If within a 7 year period, the waiting period is 5 years from the most recent discharge/dismissal date
• Foreclosure – 7 year waiting period from the completion date
• Deed-In Lieu or Preforeclosure (Short Sale) – Minimum 2 year waiting period

For FHA or VA Loans:

• Chapter 7 Bankruptcy – 2 year waiting period from the discharge/dismissal date
• Chapter 13 Bankruptcy – 1 year of the payout must have elapsed and the borrower’s performance must have been paid as agreed. Document that the borrower’s current situation is not likely to recur. The court must grant permission to the borrower to enter into a mortgage transaction.
• Foreclosure/Preforeclosure (Short Sale) – 3 year waiting period
• VA Loans ONLY – 2 year waiting period on Foreclosures.

Information provided by iMortgage, Roland Benson, 916-746-8412

This information should not be deemed as legal or financial advice. Please consult the appropriate professional to assess your particular situation.

For short sale assistance, contact Noel.

More about short sales…

What goes in your short sale package?

When can I buy after a short sale?

How can I repair my credit after short sale?

Short Sale Basics

Auburn CA Real Estate Mortgage Rates Decline…for now.

Looking for a mortgage to purchase a home in Auburn, CA? Better do it soon!

Inman news reports that mortgage rates dipped for the second week in a row, down from 5.05% the week ending February 10th. The median home for sale in Auburn, CA is $262,000, up from $252,000, a slight increase month over month. Another interesting statisic is that the number of months of inventory based on pending sales dropped from 5.0 to 3.2 from December to January. The law of supply and demand tells us that that a dip in supply can trigger a price increase.

The Mortgage Bankers Association (MBA) stated in their  Feb. 18 forecast, that projected rates on 30-year fixed-rate loans will average 5.2 percent during the first three months of this year, rising to an average of 5.5 percent in the second quarter, 5.6 percent in the third quarter, and 5.8 percent in the final three months of the year.

Next year, the MBA projects rates on 30-year fixed-rate loans will gradually climb to an average of 6.3 percent in the final three months of 2012.

Real the full article about projected mortgage rates here.

Pending Auburn CA home sales up 60%

January brought 60% increase in Auburn CA homes under contract!

According to TrendVision, the Metrolist MLS data reporting tool, January proved to be a month when buyers decided we had hit bottom and it was time to jump into the market.

Of the 223 homes for sale in Auburn, 64 went pending, an increase of 24 units over December,or 60%. Based on this number, the months of inventory will drop from 7.4 months to 3.5 months when the pending sales close. If you apply the law of supply and demand, could this low inventory mean the beginning of a turnaround in the local market? Time will tell.

Though the average price per square foot of sold homes in Auburn CA is down as compared to this time last year, this number has trended up over the past two months, and up 2.6% compared to last month.

 

 

 

 

 

 

 

 

 

 

Want to know what your house is worth? Submit some basic information below, and you will receive a comparative market analysis in your email box.

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Why pay someone else’s mortgage?

Home ownership costs are dropping below rental costs!

The recent downturn in the housing market resulted in a drop in rental rates, but rents are back on the rise while the cost of home ownership has dropped. As average apartment rental rates have slightly decreased, the decline has been moderate in comparison to home values, which have declined nationwide by 30 to 40 percent since the peak of the housing boom.

Wouldn’t you like a place where you can put down some roots, plant a garden, stay for a while? In this market, it can happen!

For more reasons why now is the prime time to buy a home, contact me and I’ll send you a free ebook!

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In a buyer’s market, what’s a seller to do?

Do you want to be in the market, out of the market or in no mans land?

Here’s a great video that breaks down and explains why some houses sit and others sell.

Buy a home at 50% off! No kidding!

HUD Good Neighbor Next Door program offers housing for 50% off for teachers, firefighters, law enforcement and emergency medical technicians.

What is the Good Neighbor Next Door program?

• Eligible participants can purchase a HUD owned single family home for 50% off the HUD appraised price!

What is the eligibility?

• Must be a K-12 teacher, law enforcement officer, fire fighter or emergency medical technician.
• Must be an owner occupant and live in the home for at least 36 months.

How is the home financed?

• You may use FHA, VA or a conventional mortgage, as well as cash. There is a “silent second” loan for the discounted amount, and no principle or interest payments are required on this second, so long as you maintain residency in the property for the full 3 years.

What if the house needs repairs?

• An FHA 203K loan may be applied to help homeowners make necessary repairs to the property. The cost of the repairs are combined into a single monthly payment.

Do I need to pay an earnest money deposit?

• Yes, the amount of the earnest money required is equal to 1% of the list price, but no less than $500 and no more than $2000.

Do I need to use a real estate agent?

• Yes. Only certain brokerages are registered HUD brokers. These brokerages have the special keys necessary to enter and show HUD homes. Luckily Keller Williams is a registered broker!

 See some of the area HUD homes by clicking one of the links below. If you would like to see one of these homes, contact me.

HUD Homes for Sale in Placer County

HUD Homes for Sale in Sac County

HUD Homes for Sale in El Dorado County

For more information on this amazing program, visit the Good Neighbor Next Door site, or call me!

Just Say No! 4 absolutes to keep your home loan on track!

There are four things to absolutely AVOID when qualifying for and going through the loan process to keep things on track:

1. Do Not Pay Off Bills – unless your loan officer advises you to do so to qualify for your loan.
2. Do Not Change Jobs – it is unwise to change jobs, especially if it’s in a different field, before or during the loan process. It can cause delays, or at worst derail the entire process.
3. Do Not Move Your Money – Moving your money from one bank to another, or even into a new account, can cause real problems with the verification process.
4. Do Not Make Major Purchases – It’s tempting to go out and buy a car, furniture for the new house or other major purchases. A new payment can have a great impact on the amount you can qualify for, and can cause difficulty in getting the loan approved.

Stick to these four rules until after your loan is funded, then go out and SPEND, SPEND SPEND!

 

Just kidding! You have a mortgage payment to make, for goodness sake!