The Answers To The Six the Most Frequently Asked Mortgage Questions

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As anyone in the Las Vegas area will tell you, I’ve been doing this for longer than most people can remember. And time and again, the most frequently asked questions have to do with mortgages and financing. So today, I met with Linda Bertuzzi of Nova Home Loans at 702-596-9565, a long-time partner and friend of the Mitch Schwartz real estate team and we share with you a three-part series with the answers to your questions.

What are the costs involved in making a home purchase?

There are lender fees and there are title, escrow, taxes and insurance fees. On average this adds up to about two to three percent of the sales price in terms of cash closing costs needed to close. Ideally, meeting with your lender in advance will give you a clear idea of your closing costs based on your price range, timing and other factors that are unique to you.

When Should I Set a Budget?

These days (especially with there being more buyers than there are homes for sale) it is strongly suggested to obtain a preapproval from your lender before venturing out to search for homes. Not only will you know what you qualify for in terms of your debt-to-income ratio and monthly payment but also you will be able to ascertain your expenses up front.

How Are Interest Rates These Days?

The most popular loan products these days are 15 and 30 year fixed rate loans but we are seeing a lot of lender competition. The Fed has kept the base rate low for at least a few more months, if not more, but no one can really tell when they will start to climb up again. For now, we are still enjoying all-time low interest rates. Depending on your credit and down payment investment, you may be able to secure a lower-than-average interest rate. This is just another reason to meet with a lender before starting your home search.

What Is the Minimum Credit Score I Need to Borrow Money for a House?

Though it’s fluctuated in the past, these days most lenders look for at least a score of 640. Once again, if you are making a significant down payment on the house, that number might be able to go a little lower. But lenders will no longer accept anything lower than 620 as used to be the case prior to the housing industry crash in 2007. Higher scores also translate to better interest rates so if there are two people looking to buy a home and one has a lower score – sometimes it might make sense to remove the lower score from the loan application.

What If My Credit Is Not Perfect?

Many times people will make the decision to buy a house but they have no idea of the condition their credit is in. It is critical to know in advance of starting your home search if there are any concerns that need to be rectified. If you do need help with rebuilding your credit, lenders will share with you specific steps on how to rectify concerns that could later impact your ability to borrow. Sometimes, Linda’s team has helped clients build their score higher to get a better interest rate.

How Should I Choose a Good Lender?

While all lenders will be working from the same investor pools, and therefore will likely offer similar interest rates, the challenge comes with unscrupulous loan officers that charge extra fees then call them discount points. You should choose a lender based on customer service levels, your connection with them, long-standing relationships you may have with them and by reference of your Realtor®.

Why Listening to Your Agent Saves Time and Money

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If you want to sell your home faster than your competition, it’s a good idea to take your real estate agent’s advice. Almost half of the sellers who listed their home at what the agent recommended sold their house for more money and twice as fast as the competition. It may be tempting to price your home high, but you may just be making your neighbor’s home that’s more reasonably priced look like a great deal.

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.