In today’s home market, you have likely heard the term “short sale.” Many people don’t know what a short sale is or how it works. A short sale is generally a last-ditch move on the part of both a homeowner and a lender. It happens when the homeowner needs to sell but is lacking in the equity needed to break even. Equity And Home Selling In simple terms, equity is the difference between what you owe on a home and what the home is worth. Equity is something that is generally built over time, and grows as the homeowner makes payments and the value of the home goes up. But when the market runs into problems such as an economic downturn, home values may drop. This can result in a situation where a homeowner is in fact “upside down”—they owe more than the home is worth. In most cases, the best decision is to ride out the difficult time and wait for home values to rise again, as they generally will do over time. However, there are situations where a homeowner may find it absolutely necessary to sell, even if they can’t get enough to pay off the mortgage. This […]
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A short sale or foreclosure on your credit history can make it difficult to purchase a home again, but that doesn’t mean it won’t happen. In most cases, a little time and careful attention to rebuilding your credit can make you a homeowner once again. Repairing Your Credit The first step to getting approved for a home loan after a short sale or foreclosure is to work on repairing your credit. There will be a waiting period before you can apply for a loan again, but the best thing to do during that time is get your credit score back up. Work on making smart financial decisions, paying off debts in a timely fashion, and ensuring you don’t miss payments on credit cards or other loans. Make sure to monitor your credit so that inaccuracies don’t damage it further. Waiting Periods For Loans After a short sale, you will be obliged to wait a certain period of time before you can apply for a home loan. This wait is usually three years for an FHA loan or four years for a conventional loan. Recent changes, however, have allowed buyers to purchase through FHA in as little as one year or […]
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Given the recent state of the economy and the rising rate of mortgage foreclosures, the number of properties available at rock bottom prices is at an all time high.  While purchasing one of these homes may seem like a sound investment and a great way to get more house for your dollar, there are some issues to consider before purchasing a foreclosed property.  Depending on your financial situation, your experience as a homeowner, and your access to information about the foreclosure market in your area, there are some risks involved. Finances Of Foreclosure The financial considerations of purchasing a foreclosed home can sometimes be overlooked.  Often foreclosed homes can be in need of considerable maintenance and repair to make them habitable.  You need to know this cost when making the purchase, or you may end up with a considerable amount of debt in bringing your home back to its original shape.  Also, even though the price of the property is right, there are other financial considerations you may not have considered.  The cost of maintaining a home, property taxes, and utilities are all expenses that may be greater than your budget will allow, especially if you are purchasing a home […]
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