Buying a Home: A How-To Guide .............

June 16th, 2009 1:59 PM

New homebuyer numbers

It's important to analyze the financial consequences of continuing to rent versus obtaining your first mortgage and becoming a new homebuyer.  Consider not only the cost of your first mortgage, but the cost of maintenance, homeowner's insurance, and property taxes, as well. Don't make the assumption that you're better off owning rather than renting-this isn't always the case.

Define your dream

Before you start previewing properties, spend time defining exactly what you want. A good realtor will interview you to uncover this information, but you should prepare early for this conversation, because you may not be sure what you want in your new home. Consider size, the number of bedrooms and bathrooms, age, neighborhood, and amenities. You can then share this information with your realtor to see how your demands and budget match up with what's available on the market.

First-time homebuyer agent

Choosing the right real estate agent is no minor task. Ask your friends and family for referrals, and interview prospective candidates to find the right one. Find someone you trust, who's experienced with new homebuyers.

Preview properties

Armed with your list of must-haves, start previewing properties.  If your budget is tight, you may have to adjust some of your demands. It's alright to give up on things you can add later, such as two sinks in the bathroom or a patio cover on the back deck. It may not be alright to give up on things you can't easily change, such as neighborhood quality, proximity to good schools, number of bedrooms or bathrooms, etc.

Make a short list of the best options, and then revisit those homes to evaluate their locations, price points, amenities and how much work, if any, will be needed to fix them up.

Preserve your right to negotiate

Your final price should consider disclosures about the property provided by the owner and problems revealed by the inspection. If you make an offer before you receive this information, verify that it includes verbiage relating to these two items. You want to preserve your right to negotiate the price should the home need costly repairs.

Read and sign  

The transaction closing is generally a complex coordinative effort, but one that can be managed if you surround yourself with the right first mortgage professionals. Remember to read all the paperwork before you sign, and request clarification on everything you don't understand. It might seem overwhelming, but remember, you're only a first-time homebuyer once.

Please call our Assist-2-Sell Office for our FREE Homebuyers Seminar Dates and Times: 314-993-6023.

Finding Help if You Owe More Than Your Home is Worth .....

June 1st, 2009 4:50 PM

Negative home equity means slim options

Homeowners who find themselves in negative equity territory don't have to automatically accept huge financial losses. Other options include:

• Staying put. From a financial standpoint, the best option may be to stay in the home until housing values recover. It's not uncommon to purchase assets that lose value. Car owners, for example, are often upside down on their loans shortly after the purchase is made. People accept this scenario, because transportation is one of life's necessities. In this sense, making payments on an upside down mortgage isn't much different from paying rent-people do it when they need to, and they get by just fine.

 

• Selling short. Homeowners could try negotiating a short sale with their lender. In a short sale, the home is sold at market value, and the lender writes off the remaining unpaid loan balance. This solution resolves the situation more quickly than waiting for a recovery, but it will hurt the homeowner's credit score.

 

• Voluntary foreclosure. Homeowners could choose to surrender the deed to the home and move out voluntarily. The advantage here is that the homeowner decides when to cut the emotional ties to the home. The disadvantage is that the homeowner's credit score will be damaged.

 

• Renting the home. In cases where the homeowner is forced to move, such as with a job transfer, renting out the home might be the best option. Even if the rental income doesn't cover all of the expenses associated with owning the property, the credit impact will be less damaging than a foreclosure or short sale.

 

• Refinancing with Home Affordable. Homeowners who are only slightly underwater may be eligible for a 105 percent mortgage refinance through the government's Making Home Affordable mortgage refinance program. See MakingHomeAffordable.gov for more information.

You don't have to let your mortgage balance pull you under the water line. The options aren't ideal, but you can find a way to tread water through this home equity housing crisis.

Call us Today at 314-993-6690 - We are here to help you!

Dangers of Walking Away from your Mortgage....

June 1st, 2009 4:34 PM

Foreclosure ethics

Some of the nation's most prominent mortgage lenders and bankers have been exposed as predatory culprits or exorbitantly overcompensated greedy executives who couldn't care less about their customers. For many homeowners, this behavior undermines the traditional American sense of moral responsibility that they might otherwise feel regarding their financial promises. The ethical motivation for repaying mortgage debt by a responsible person who signed a contract in good faith is offset by a justified lack of faith in the ethical standards of lenders, bankers, and Wall Street investors, who capitalized on the housing bubble and made the economy go bust.

Many homeowners were pressured into bad loans unknowingly, and others were given shoddy treatment as they attempted to negotiate a refinanced mortgage or loan modification solution that would be mutually beneficial to both them and their lenders. They're now fed up with trying to play nice, and are ready to leave the banker holding the bag-and house. So they bite the foreclosure bullet and walk.

Foreclosure and credit scores

Long after the shock of losing one's home is overcome, many of the financial repercussions of foreclosure may linger and cause more problems over time. In some cases, lenders are seeking judgments against homeowners whose properties are foreclosed and fail to sell for high enough prices at the foreclosure auction. Unless the lender provides a written release regarding what is owed and what has been permanently forgiven, the borrower may still be on the hook for the lender's losses. The homeowner will also take a severe credit hit because of the foreclosure, and that will be amplified if there's a claim by the lender for an outstanding debt balance.

Once your credit score goes down, rates for everything from car and health insurance to credit cards will go up.  Landlords may also charge more because of the perceived credit risk of renting to someone who failed to make a monthly housing payment. Then again, the landlord may refuse to lease to anyone with a foreclosure in their recent history, preferring to rent to those who have a better track record. Employers also do credit checks before hiring, so a homeowner who walks away from a mortgage might find himself jobless, homeless, and paying extraordinary rates for loans.

Meanwhile, a foreclosure generally stays on credit reports for seven to 10 years.  Before you walk away from your mortgage, investigate every means possible to avoid it, including a loan modification or a refinance mortgage. Otherwise,  it could be a long, hard road ahead.

Please Give Us A Call at (314) 993-6690 - We Can Help!

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