Homeowners Doing a Short Sale Should NEVER Leave The Home Until the Buyer’s Loan is Approved

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There are two websites where you can get more information and find out if this program is right for you:

www.LasVegasShortSaleHelper.com

www.ShortorStayLasVegas.com

A short sale can be one of the most daunting experiences in a homeowners’ life. First the difficult decision to put it up for short sale after realizing the property is underwater. Next, deciding to go ahead with it and then implementing the huge change. Working with agents, trying to keep a straight face while going through showings on the home – all are difficult things to deal with considering the emotional situation at hand.

A common question that is asked of us all the time is about the amount of time the homeowner will be able to spend in the home before having to leave. The answer is largely “it depends” but for the most part it is usually four months or more.

Since the short sale process is a very long one, homeowners should never leave the house until a buyer has completely seen through their financing. The reason for this is that you don’t want the lender to think you have abandoned the property and then proceed with foreclosure action.

There are some good reasons to continue staying in the house, including the ability to save up funds that would otherwise have been used toward the mortgage payment. Another reason not to leave too quickly is that you can prepare for the next transition in life. Of course the last thing you want is the bank to begin foreclosure proceedings if they think you are no longer there and have walked away from the mortgage.

Keep in mind, once an accepted offer comes in on the property it must be approved by the lender before anyone can proceed to the next step. That approval process can be anywhere from 60 to 180 days after submitted to the bank. Even after the approval comes through from the lender, another 30-45 days will go into the financing end of it for the buyer. Depending on the type of financing the buyer chooses it can take more or less time.

In general, most short sales typically take about four to six months before everything is said and done. The single most important thing to keep in mind is that moving anytime before the very end when the buyer has funding in escrow can be seriously detrimental to you.
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If you would like more information on short sales or want to discuss your situation in detail to learn of your options, we invite you to contact us today!

If I Short Sale My Property Will I Owe Taxes On It?

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Many of you are just beginning to consider doing a short sale on your home. If your mortgage is underwater and you feel there are no other options short of allowing the bank to foreclose on the property, a short sale may be the perfect solution. But along with this solution comes some important questions – particularly having to do with taxes.

Will you have to pay taxes on the money you are forgiven from repaying on a short sale?
For the most part, the answer is no. 

If you sell your home, the short sale is approved by the bank(s) and the property makes it to escrow and closing by the end of this year (December 31, 2012) then there is a good chance you will not owe any taxes on that forgiven amount.

Also for the money that is being forgiven, or discharged, if it was entirely used only to purchase the property rather than used as funds you accessed through the equity on your home so that you could spend it elsewhere, then there is a good chance that you will not pay taxes on it.

Rental properties for the most part are also not taxed through the end of this year if involved in short sales.

The important thing to remember is this: every situation is unique and each property has aspects to it that will likely not be like any other short sale situation. For this reason, the best way to truly confirm whether you will owe any taxes on your short sale is to meet and consult with a Certified Public Accountant. If you would like some references for CPAs in our local area, we would be happy to provide them.
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If you would like guidance, advice or even if you would like simply to review your options – contact us today. We look forward to helping you!

There are two websites where you can get more information and find out if this program is right for you:

www.LasVegasShortSaleHelper.com
www.StayorShortLasVegas.com

Worried About What Your Neighbors Will Think If You Short Sale Your Home?

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Two words: don’t be. Here’s the thing. On the one hand you may be concerned with how it may look if and when the neighbors find out you are short selling your home – but on the other hand, you are dealing with one of the most difficult situations you will likely have to face.

There are two websites where you can get more information and find out if this program is right for you:

www.LasVegasShortSaleHelper.com
www.StayorShortLasVegas.com

So how do you get over the fact that everyone you have lived with in the neighborhood will soon enough know your mortgage is under water? You focus on what is really important; you. 

Having said that, it is worthwhile to know that while neighbors might prefer a conventional sale over a short sale – they would MUCH rather have a short sale in the area as opposed to a foreclosure. This is because of the typical types of activity you might expect to see happen in a foreclosed home. A vacant home might attract vandals, sit there for who knows how long and ultimately drag neighborhood home values down.

Your short sale, which you can explain to anyone that asks, is a viable alternative that not only keeps the values at market level but also maintains an owner-occupied status of the home. The key here is to use a real estate agent that knows what they are doing. You could fall into the trap of dealing with a real estate that is less experienced in short sales. We see homeowners falling victim to those inexperienced agents that advise underpricing the home to “attract multiple offers”. THAT is what might set your neighbors off a bit.

So the next time you have any qualms about how others may perceive your much-needed short sale, direct all your energies toward the fresh new start you can get without damaging your credit or your reputation nearly as much as a foreclosure would.

As always, please feel free to call us, email or walk right into our office if you would like a one-on-one discussion about your real estate needs. We look forward to hearing from you!

The Home Affordable Foreclosure Avoidance Program Seeks to Assist Struggling Homeowners

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When President Obama signed the Home Affordable Act into law, many aspects were introduced but all had one common goal; to help homeowners get through the difficult times that have placed them in impossible situations. After the housing market crashed in 2007, countless Americans were faced with the possibility of losing their home to foreclosure – largely due to a sudden dip in values resulting in them owing more on the home than the home was worth.

The Home Affordable Foreclosure Avoidance Program is a benefit that allows qualified homeowners to obtain a waiver of deficiency so that the lender does not come after them once all is said and done. One very attractive aspect of the program to homeowners considering alternatives to foreclosure is that the bank will provide up to $3,000 in moving costs at the time escrow closes.

Though this is a popular program, not everyone qualifies. For starters, the home in question must be the borrowers’ primary residence. There are other considerations too.

To be sure that you are availing the maximum amount of the benefit available to you, be sure to contact a real estate agent that is well versed in the workings of short sales, foreclosure avoidance and the HAFA program in general. There are two websites where you can get more information and find out if this program is right for you:

www.LasVegasShortSaleHelper.com
www.StayorShortLasVegas.com

The first website is a great resource for information. The second website will help you figure out when your property will become an asset again. Both will provide some direction on where you might want to head next.

For a customized consultation about your situation with an expert that has dealt with many, many short sales, contact us today. Keep in mind, not everyone qualifies, there is a specific process that must be followed and not every agent has the expertise to deal with this type of complex transaction. It is critical that you find an agent that is committed to your best interests.

Qualifying for HAFA; Exploring Alternatives to Foreclosure

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Go to www.LasVegasShortSaleHelper.com for more information >>

If you feel you are stuck with a home that has a mortgage larger than its value, it may be time to consider a short sale. For more reasons than ever now, there are programs issued by the government designed to help homeowners through this very difficult time in their lives.

With already existing incentives, such as the $3000 relocation funding that is disbursed in many short sale transactions, there are now some more guidelines that have widened the scope of qualifying homeowners.

First, let’s look at the six must-know items about the HAFA (Home Affordable Foreclosure Alternatives Program) that have been around for some time now:

• The home must have been purchase prior to 2009
• It must be delinquent, in default or seriously in jeopardy of being in default
• An unpaid principal balance of less than $729,750 is the limit
• The lender servicing the loan must be a HAMP (Home Affordable Modification Program)
participating lender
• The home must be the applicants’ primary residence*
• The monthly mortgage amount is not to exceed 31% of the homeowners’ gross income*

Now, having said all this, notice the asterisks on the last two points above. The notes below will share the most recent changes to the program that have enhanced qualification eligibility guidelines.

*Effective June 1, 2012 President Obama Administration made some important changes to the HAMP Program. Among other relaxed guidelines, homeowners with secondary properties that are currently rented or where the homeowner intends to rent them may qualify.

Another change reported to the program is related to homeowners’ debt-to-income ratios. As of the newest guidelines, borrowers that exceed 31% debt-to-income ratio may still be eligible for the program.


We know that not all benefits are available but a lot of it has nothing to do with whether a seller qualifies for it or not. The real reason many homeowners never see light of day on some of these cash incentives is because they are dealing with an agent that has little to no experience with short sales and the HAFA program. A good real estate agent that understands the HAFA process is critical. If you end up working with a real estate agent that is less experienced with these types of sales then you stand to risk losing thousands of dollars. And for no good reason.

It’s all about knowing the timing of the process, filling out all documents precisely and completely, making sure everything is perfect. As far as the $3,000 relocation incentive that is a part of the HAFA program or other potential lender-based incentives, only your lender will actually be able to tell you whether you qualify for an incentive. What we can do is position you to be a strong candidate for what might very well be rightfully yours. For a customized consultation to discuss your specific home and situation, contact us today.

Mortgage Debt Forgiveness Act

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By now, chances are you have probably heard the term “short sale” – especially during the past five years with our housing market struggling to recover from the housing market crisis of 2007. Luckily, we have enjoyed a strong economy and have not seen too much of the same dire circumstances many homeowners across America have experienced. Still, if you owe more on the house than what it is worth and are looking to sell it, a short sale is likely your best option.

Everyone has a pretty good idea of how a short sale might impact one’s credit outlook. Though it may not have as heavy an impact on credit as a foreclosure might, a couple years after a short sale before the homeowner can consider buying a home again. There is, however, a tax implication of doing a short sale that many people are not aware of. The amount of debt that a bank agrees to forgive in order to allow a short sale to take place is forgiven debt and the IRS considers that amount as income. As such, all income is taxable, leaving the homeowner that opts for a short sale with a significant tax bill at the end of the year.

Mortgage Forgiveness Debt Relief Act

In light of our nation’s struggles with property ownership after housing values plummeted, the Mortgage Forgiveness Debt Relief Act was signed into action, allowing homeowners an exemption on discharged or forgiven debt from the sale of a primary residence.

This benefit has been around for some time now and has been extended by the government in the past, however its deadline is fast approaching with a program end date of December 31, 2012. This means that all homeowners considering short sales should complete their transaction before the end of the year.

Short Sale Process Can Take Months

At first, when countless Americans struggling with the economy and declining values, short sales were slowly began picking up pace. Then, when the 2010 robo-signing scandal broke loose, banks again lacked confidence in doling out relief in this form to borrowers, ending up in short sale processes that could take up to a year or even more. 

Today, however, many banks have streamlined the process and even prefer the short sale route versus a foreclosure. Compared to the lengthy process times and extensive legal fees involved in a foreclosure, banks are even willing to pay out cash in some short sale cases.

Window Of Opportunity Will Not Last Long

Since the halfway mark of the year has passed, we strongly advise any homeowner looking to sell their home despite owing more than its current value, to contact us today. Timing is key and with just a few months before the end of the year to take advantage of this benefit, now is the good time to start the process.

Ten Facts the IRS Wants You to Know About the Mortgage Debt Relief Act

1.  Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence. 

  

2.  The limit is $1 million for a married person filing a separate return.

3.  You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure. 

  

4.  To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence. 

  

5.  Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion. 

  

6.  Proceeds of refinanced debt used for other purposes – for example, to pay off credit card debt – do not qualify for the exclusion. 

  

7.   If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven. 

  

8.  Debt forgiven on second homes, rental property, business property, credit cards or car loans do not qualify for the tax relief provision. In some cases, however, other tax relief provisions – such as insolvency – may be applicable. IRS Form 982 provides more details about these provisions. 

  

9.  If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed. 

  

10.  Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.

My Credit is Shot, Why Do I Need a Short Sale?

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As a homeowner, if your credit is already shot and you are having financial hardship to the point you cannot pay your mortgage, you should consider a short sale in opposition to foreclosure.  There are many reasons why you should consider a short sale, even if you are just late on your mortgage.  If you are late on your mortgage and do not need to foreclose your property, you will still slip farther into financial difficulties due to the late fees.

When you are late on your mortgage it affects all of your payments.  Your mortgage payment history can affect your credit score by up to 35 percent of the total score.  35 percent of your total score is a huge impact on your credit score, so you must minimize it as much as possible.  If you find yourself in a situation where you have gotten behind on your mortgage payments and your credit score is getting killed, a short sale is a viable option.

A short sale will still impact your credit; however, the impact will not be as severe as a foreclosure.  A short sale will impact your credit score for around 18-36 months, while a foreclosure will impact your credit score for between 5 and 8 years.  Also, if you have credit cards through any company, the contract that you signed with the credit card agency will have a clause stating that if your credit changes significantly, the credit card company can change the interest rates.  So when your credit score drops drastically due to a foreclosure, the interest rates on your credit cards will sky rocket, leaving your in further financial trouble.

Your credit card interest rates are not the only thing affected by a declining credit score.  Your insurance rates are also affected by your credit score.  Insurance companies often times base their rates on a person’s credit.  If you foreclose on your house, in addition to seeing your credit card interest rates increase, your insurance rates will increase as well.

On credit applications, there is a box that asks if you have ever had a foreclosure.  Any time after you have a foreclosure, you will always need to mark this box.  There is no expiration date; it will be with you from that point on.  There is no such box for a short sale.

A short sale is often a much better option than a foreclosure.  A short sale can stem the tide, stop the bleeding, and protect yourself and your family from financial devastation.  

Do You Have to File Bankruptcy to Avoid Foreclosure?

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Foreclosure and bankruptcy are two of the scariest words for any home owner. However, if you are having serious financial difficulties and fear that you might have to declare bankruptcy to save your home, you may have other options. So instead of panicking and declaring bankruptcy in haste, consider your options and you may be able to retain your home without taking such a drastic step.

If a notice of default has yet to be filed or a notice of sale has yet to be recorded, bankruptcy may not be your best option. If you are having problems paying off your home, but are not overwhelmed by any other bills, then, again, there may be better options than bankruptcy.

The best thing any home owner who finds them self facing a possible foreclosure or bankruptcy, is to talk with experts about what their top prospects are. Meeting with an attorney to answer any questions you may have is a great place to start. Also, real estate agents are very knowledgeable in this field, so consulting with a professional in the real estate industry can help you find the option that is most suitable to your position. Because every instance of possible foreclosure is different, there are many different options the person facing foreclosure can choose from. The best thing to do is to arm yourself with insight into the problem and find the solution that is most pertinent to you.

5 Tips for Selling in Today's Market

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Selling a property in today’s market can be a daunting and stressful experience for any homeowner.

However, there are five easy, proven tips to lighten the load of selling your home.

Make Your House “Show Ready”

Living in a house and selling a house are two different things.   When you are going through the process of selling your home, make sure that the property is clean and ready for showings at all times.  Having sparkling counters in the kitchen and a fresh smelling bathroom can go a long way in making a great first impression to the prospective buyer.  By having a “show ready” house, this tells the buyer that you are a serious and dedicated seller.

Give the Buyer Some Privacy

As a seller, you want to avoid being present during the showings.  If you give the potential buyer some privacy, he or she will be more inclined to speak candidly about the pros and cons of your property.  Also, by vacating the property during the showing, the buyer is more easily inclined to imagine the house as their own.  They feel freer about rearranging furniture, envisioning which rooms their kids will be able to play in, and any other modifications they would like to make.  If the house is open to the buyer, they are able to start to feel like it could be theirs instead of yours.

Make Your House Available 

Never underestimate the power of a lockbox!  Many of the agents showing houses in your market are going to prefer to show a property that they know that they will have access to.  You want to have the most showings possible in order to sell your house quickly and the best way to have the most showings is to have an extremely accessible property.

Price Your Property Effectively 

The housing market is a very competitive entity.  It may seem very tempting to list the price of your house at a rate which will make you the most net dollars, but this is a mistake that trips up many sellers.  You want to make sure that your house is priced right to bring in the highest amount of net dollars AND at a price that will sell the property in the shortest time possible. When agents and buyers see that a home has been on the market for an extended period of time, they assume that there is something wrong with it. The National Association of Realtors has backed this up statistically.  The NAR states that sellers that price their property 10% above market value end up selling their property at as much as 6% below the market.  The numbers don’t lie!

Hire the Right Agent

Take time in finding the right agent.  The right agent should be someone you trust and the best way to find the right agent is to interview the candidates thoroughly.  Ask each potential agent about their experience in real estate and in the local market.  The right real estate agent can be worth their weight in gold and make the process of selling your home enjoyable.

Exploring the Main Differences That Makes a Short Sale a Better Choice Than a Foreclosure?

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Just a couple years ago, most people usually thought they had to give up their home in a foreclosure when they faced a financial stonewall.  However, since then the phenomenon of short sales has been on the rise, leaving homeowners a bigger, better and brighter option for the present and future.  In this article, we explore the comparative differences between the two so you can gain an edge when deciding which is better for you.

Purchasing Power

After walking away from your mortgage through a foreclosure, you can expect to feel the negative impact of it for five years, in terms of being able to purchase another home.  Even then, like a bankruptcy, a foreclosure is something you will perpetually have to report no matter how long it has been since the home went into foreclosure.  

Though these days you see a lot of talk about the financial and credit impact foreclosures have on homeowners, the unseen part of it is something to be dealt with.  Going through this process can leave a lasting emotional hole in people who otherwise were law-abiding citizens, going about their normal lives when all of a sudden they are faced with severe financial hardship and must resort to extreme measures.  That, or if the value of their home has dropped well below the amount they paid for it and they see very little hope for the future.

Short sales are much simpler.  They will affect your purchasing power for a mere two years, often just the amount of time it takes to get back on one’s financial feet.  Not only that, there is no requirement to report a short sale transaction.

Credit Outlook

There are two main areas that are of concern when it comes to your credit – your credit score and your credit history.  In case of a foreclosure, credit scores drop a whopping 200 to 300 points.  This can have a significantly negative impact on your ability to purchase big-ticket items or secure loans in the future.   Not to mention it takes years to rebuild a credit score that has dropped that low.   In terms of credit history, a foreclosure remains visible on your credit report for anywhere from ten years or more, rendering each future potential lending transaction either useless or very hard-pressed at getting approved.  The overall impact you will see on your credit will be for about three years.

Short sales are far easier on your credit outlook, in that the point drop is only about 50 on average and the transaction itself will impact your credit profile for as relatively little as 12 to 15 months.  The one thing to keep in mind is that if you have defaulted on any payments or if you already have a weak credit profile, the post-short sale point drop on your credit report can be more than just 50.  Also, there is no formal reporting or declaration of a short sale on your credit report like a foreclosure although the transaction will show up as either settled or not paid in full.

Amount Still Owed

Usually there is a gap in the amount owed after owners walk away from a property and the bank assumes responsibility.  In case of a foreclosure, given the amount of processing time and resultant vulnerability and exposure of the property, the value can and often does drop greatly after vandalism and from sitting there unused.  The Deficiency Amount (also called Judgment Amount) is the difference that remains after the bank calculates what was owed on the property at the time of foreclosure and when they sold the home. Because of this vandalism and vulnerability, the amount of value drop is far more than with a short sale, when the homeowners are still residing in the property during processing.  The bank has the legal right to pursue homeowners for the amount difference.  

Short sales differ in that not only is the deficiency amount much less but also, your Realtor can negotiate a waiver of that amount so you don’t have to pay for it.

How To Write a Hardship Letter So You Get What You Want From the Lender

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What Is a Hardship Letter?


As the name implies, when a person owning a property with a mortgage on it faces difficult times that result in an impact on their ability to pay the loan, the need to communicate to the lender arises.  Regardless of whether the loan can no longer be paid in a timely manner or if it is difficult to pay most of it – there are some avenues other than leading to foreclosure that the homeowner can pursue.  

Loan Modification Hardship Letter

There are two types of hardship letters that are commonly written in light of the nation’s challenged real estate market these days.  First, a loan modification hardship letter is the initial communication between the homeowner and lender, notifying them of the financial hardship but with the intention to manage most of the loan.  The goal of a loan modification is to hold on to the home, only reduce the amount owed or in other words, adjust the loan.  The basic language in this type of hardship letter states the type of hardship the property owner is facing, their intention to continue living on site and the expected amount sought to be modified in order for the owner to manage.

Short Sale Hardship Letter

Unlike a loan modification, where the property owner is able to continue living in the residence with the provision of a smaller loan, a short sale request entails the bank accepting less money than what is owed on the home, through a sales transaction.  This occurs when the value of the home is worth less than the amount owed on the mortgage.  A common occurrence lately, short sales are an alternative option to many homeowners who are unable to maintain their mortgage payments due to job loss, medical situations or anything else. 

Given the state of our current economy, there are many cases of short sale applications and each begins with a hardship letter stating that the homeowner’s financial situation does not seem to be improving anytime soon and the only viable option is to move out to avoid foreclosure.  Banks prefer this to foreclosures since the latter often result in legal fees and other costs that would not necessarily occur in a short sale transaction.  Making that determination, however, is what impacts the amount of time that goes into a short sale application and approval or denial process.

What Should Be Included?

Not too much information is needed in a hardship letter but it should be enough that the reviewer is able to make an informed decision about your case and determine next steps.  You will need to include the property address, reference a loan number or numbers if multiple loans are involved and name all persons or parties that are named on the loan.  If the motivation for seeking relief from the lender is due to extreme conditions in your life that have hindered your income or caused unemployment, provide supporting documentation and outline the relevant specifics in the letter.  Over-exaggerating will frustrate the loan officer and possibly impede processing so it’s important to remain straightforward and write in a clear manner.

Things to Keep In Mind When Writing

Be sure to write clearly, without the use of unnecessary jargon and be as direct as possible.  Avoid overly emotional statements, without missing the boat entirely on explaining your financial hardship.  Do not write more than one page, as the hardship letter’s purpose is to notify the lender of your current financial state and request review of the loan.  The briefer the letter is, the easier it will be for the loan officer to review it.  Make sure you are able to corroborate the statements you are making in the letter with documentation.

Why Does This Matter?

Despite news reports, the mortgage industry is very busy and with the influx of short sale applications on many lenders’ tables, the processing times are very long involving arduous and tedious paperwork.  When a short sale reviewer receives a short, simple, succinct and to-the-point hardship letter, not only does it make their job easier but it also eliminates the need for further clarification and consequently more time wasted.

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Of course, depending on how complex the situation may be – a longer and more detailed hardship letter may be necessary, but once an application moves forward additional information can be provided.  The key is to communicate your request to have your loan reviewed, the reasons for such and relevant specifics that would be needed in order for the application to be considered.

Is It the Right Time to Sell or Stay Put and Wait For Change?

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Here is a great site if you're facing a short sale: www.shortorstaylasvegas.com


These days so many homeowners are wondering if it’s the right time to move on and move up into a better home.  So many questions ensue. How long will it take for the market to be back to normal again?  Will today’s interest rates go on indefinitely?  How can I tell before they begin to climb again? If I wait long enough will my home’s value come back up to what it was just a few years ago?  The answers are not so simple but one thing is for certain.  Property values take time to climb up and rebound after bouts of the situation that we are facing at present.  Here are some pointers that will provide further insight as to why selling sooner may make more sense.

When Incomes Go Up – So Do Property Values

Many industry experts believe the only way for home prices to go back up is for buyers to have higher incomes.  Based on this assumption, a good number of homeowners’ expectations that their property will miraculously gain 20% to 30% of value on the market within the next year or so are sufficiently unrealistic. Keep in mind that the average annual income increase nowadays is anywhere from three to five percent, which translates to a waiting period of until at least 2017 before you will regain housing values from a few years ago.

How Long Will It Take For the Job Market To Improve?

As we find ourselves in yet another double dip recession and the nation is struggling to deal with the economy, the unemployment rates in many states continues to plummet or stay where it’s at; a dismally low level.  No one can say how long it will take for the job market to improve but analysts predict that though process will be slow it will happen.  

Interest Rates Are At “Go Get ‘Em” Levels

Being able to finance a home was much easier just a few short years ago but having said that the fact of the matter is that now, interest rates make up for the otherwise detailed and careful application and approval process.  While in the midst of a 30-year low, interest rates at about 4-4.5% clearly indicate this is a very good time to buy a home.  Of course, for owners of existing homes this can mean a loss on the property they sell but by moving into a home that will most likely increase in value in a few years’ time it offsets the loss.

Keep Living But Live Happier

Why not wait for the market to improve before selling your existing property and moving into another?  The return on investment can be significant when you factor in the changed interest rates regardless of improved property values.  Consider this: Sell an existing home for $200,000 today and buy up into a new home worth $320,000 at the current low interest rates, versus wait for 5-7 years to sell the home, which by then might be worth $220,000.  The interest rates by then to purchase the same new house worth $350,000 will be at least a couple percent higher.  The end result is about $12-$15,000 in savings by selling and buying sooner – and that many more years of happiness.

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A few other things to consider are whether or not you are willing or able to maintain your existing home or would you prefer moving into a condominium or relocating to a warmer climate?  Would this be a perfect time to sell your property and invest in a dual home that can also be rented out for some additional income?  Also, how can you be sure your property value will not dip even further as you wait the market out?  Wouldn’t you want the freedom to at least be able to get into a newer home, at a great price because of the current housing prices? 
The best way to really know what steps to take is to contact your Realtor for an in-depth consultation and to learn whether now is the perfect time for YOU to sell.

Get Debt FREE and Raise Your Credit Score!

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Pay Off  YOUR Debt,  NOW!

The only way to raise a credit score is to pay off your debt or at least reduce it to an acceptable level! I recommend paying off high interest rate  credit card debt first.They can suck the life out of your finances! As for those, "magic cure" credit repair commercials you hear and see promising a quick fix, their scam is even greater than high interest rate scam your credit card company is charging you!

What steps do you need to take to build your credit score to the highest level possible? How can you secure a mortgage with a lower interest rate? Use my common sense guidelines provided below to get rid of the debts that have reeked havoc on your chances for a lower-interest mortgage on your dream home.

1.) Pay Your Bills on Time – All the Time!
I know, I know – this isn’t always easy. But, lenders of all kinds look for reliability on your part. Since loaning money is a risk for them, they look for signs that you have a reliable income and the discipline to pay your bills over time. When they see those signs, they say to themselves, “Hmmm, this person looks like a good risk to me; therefore, he or she deserves a lower interest rate.”

2.)  Do Not – I Repeat! – Do Not Open Unnecessary Credit Cards!
People sometimes open credit card accounts in order to increase their available credit. Absolutely avoid this temptation! It’s simply too darned easy to charge for items you don’t really need, and, before you know it, you’re back in debt or have increased it to an unreasonable degree.

3.) Budget, Budget, Budget!
Financially, this is possibly the most “unsexy” task there is, and yet it’s the most vital and important one you can possibly undertake! YOU need to figure out where you stand financially. Budgeting will allow you to get rid of debt, improve your credit score, and shape a low interest rate financial future for you!

4.) How Much Debt is Too Much?
Here’s the first question to ask yourself in terms of budgeting: How much debt is too much?
Actually, there’s a standard financial formula that allows you to answer that question. This formula is called the debt to income ratio, and what it does is measure your net monthly income against your debt.

Here’s an example:
"George” has a net monthly income of $2000 and his monthly debt payments are $500.
So, to get his debt-to-income ratio, George divides $500 by $2000 and gets this ratio:
500÷2000 =.25 (25%)
  
Is this a good ratio?
Well, financial experts generally agree that debt expenses should be 25% or less of your income. George’s ratio is reasonable but could be better.So, what’s the ratio of your debt to your income? Figure that out by taking the next step.

5.) Calculate Your Debt-to-Income Ratio
You can answer that question by completing the following tasks:

Task 1: Analyze your bills from the last month. Add up all the fixed expense items (rent, mortgage, car payments, child support, loan payments, etc.)

Task 2: Review your credit card bills and add up the minimum payments owed on each card.

Task 3: Figure out your monthly take-home pay (net salary).

Task 4: Divide your monthly fixed expenses by your monthly income to get your debt-to-income ratio.

What percentage did you get? If it’s 25% or greater, then it’s definitely time to budget in order to reduce or eliminate your debt.

 I’d be happy to discuss some more in-depth 

Understanding Your Credit Report

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Credit outlook is the most important aspect of the financial lives of millions of Americans.  In fact, it is almost as unique as a thumbprint so it should be guarded and carefully protected.  Not only does your credit report share an in-depth insight into your most personal financial details but it also shows those people that are accessing the report a lot about your financial personality.

So if you are buying a home or automobile, want a credit card, have applied for new phone service or anything else that requires the pulling of your credit report, beware and be aware of what is on your report.

A Credit Report Is a Glimpse Of Your Financial Lifestyle

Though mortgage companies view a different version than you do, bear in mind that the details are very much available and ready to see to any creditor that chooses to look over the history of your financial responsibility.  The single most determining factor in deciding your mortgage application aside from your income eligibility and a few other aspects, is your FICO score.  Lenders take the average of all three scores obtained from the three reporting agencies but when you view your report you will have access to one FICO score rather than the average of all three.  You will however be able to view the same detailed information visible to creditors.

The basics will be included on the report but in addition there will also be contact information for each of your creditors, type of credit, the loan and/or credit amount that corresponds with each and the date each line of credit was established. There will also be information about any judgments against you and any settlements you may have made in the past.  Any derogatory things such as repossessions, bankruptcy, past due amounts or debts that have gone to collection will be included on the credit report as well. There is a new trend that has become more prevalent with many creditors, where agencies report your rental payment history and other things showing how responsible you are with debt in situations other than just those that appear on a standard credit report . The CoreLogic® CoreScore report is a new report that almost acts as Big Brother, reporting a lot more detail on your spending habits as a consumer.

Things To Look Out For When Reviewing Your Credit Report

One of the best things you can do for your financial health is to pull your credit report at least once every six months.  Check your report for any discrepancies and most importantly be aware of your financial situation.

If the balance owed is very close to or equal to the maximum high balance limit on any or all of your lines of credit it raises a red flag to potential creditors.  That shows you have reached the maximum credit limit on a number of your responsibilities, and it is a factor that could get in the way of your obtaining new credit.  As soon as you see your credit has reached about 80% of the maximum limit it is a good idea to start paying your debt down as soon as possible. 

Additionally, if you see any derogatory items that are inaccurate you should work to resolve them by contacting the creditor and setting the record straight.

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The best way to ensure strong financial health is to be aware, stay up to date on your report and maintain accuracy.  Using the report as a tool you can guide your financial situation to where you want to be and once there, be sure to stay on top.  For assistance in pulling your credit report or any other inquiries you may have, contact your loan officer or Realtor today!