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How To Buy A Home

13 Thursday Feb 2014

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Home Buyers, Home Owners, Home Sellers, lender programs, Lenders, loan application, Loan Officers, Mortgage, mortgage approval, Prospect Equities Inc., Rent vs. Buy, Renters

Get Ready To Buy That New Home!

  • Want to find more opportunities in the Real Estate market?
  • Do you know what you need in order to buy in this market?
  • How much down payment do you need?
  • What type of financing is available?
  • What is the lender underwriting process and how do they evaluate you?
  • How do you get pre-approved for a mortgage loan?
  • What are the steps in the buying process?

Contact me for assistance:

Regina Wallace, Real Estate Broker

Prospect Equities Infiniti

Regina@ReginaWallace.com

http://www.ReginaWallace@Realtor

Posted by Regina Wallace | Filed under Foreclosure, Home Buyers, Home Loan & Mortgages, Home Sellers, Homeowners, Investors

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Rules Loosen to Buy a Home After Foreclosure, But Lenders May Balk

10 Thursday Oct 2013

Posted by Regina Wallace in Foreclosure, Home Buyers, Home Loan & Mortgages, Home Sellers, Homeowners, Uncategorized

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Banks, Credit Report, Credit Score, For Sale, Foreclosure, Help for homeowners, Home Buyers, Home Owners, Home Sellers, lender programs, Lenders, Loan Officers, Mortgage, Pre-Approved, Prospect Equities Inc., Real Estate, Renters, unpaid debt


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FHA and Fannie Mae are making it easier for homeowners who lose a home to foreclosure or short sale to buy again, but it might not make much difference if lenders don’t go along with the changes — since they don’t have to.

First, here’s what’s new at FHA and Fannie:
FHA rules now let you apply for an FHA mortgage 12 months after a foreclosure, short sale, or a deed-in-lieu of foreclosure if you meet two conditions:
1. Your loss was caused by economic conditions beyond your control.
2. You complete housing counseling.

Note: Mortgage lenders have traditionally made you wait two years after a short sale or deed-in-lieu and seven years after a foreclosure to apply for a mortgage.

Once you’ve met the conditions, you’ll still have to meet all the usual mortgage loan rules and guidelines that lenders use for everyone — like having enough income (and not too much debt) to afford the refinanced mortgage.

Fannie Mae credit reporting fix: Fannie, meanwhile, has cleared up a credit reporting issue that was holding back former homeowners who sold their homes for less than what they owed on the mortgage (a short sale) or signed over their deed to the lender to avoid foreclosure (a deed-in-lieu).

In theory, homeowners who work with the lender on a short sale or deed-in-lieu are supposed to take less of a hit to their credit than homeowners who lose a home to foreclosure. In reality, credit bureaus haven’t distinguished short sales and foreclosures on consumers’ credit reports.

Fannie Mae resolved the credit reporting issue by telling lenders to add a special code in the case files of consumers whose short sales or deeds-in-lieu are recorded in credit histories as foreclosures.

Starting Nov. 16, 2013, the Fannie Mae loan underwriting system will automatically ignore the foreclosure and correctly recognize the transaction was a short sale when the code appears. Until then, your lender will have to manually underwrite your loan to take advantage of the change.

Lenders Don’t Always Follow the Rules
This is all good news. But it remains to be seen whether these new rules will make a big difference for you if you’ve had a foreclosure, short sale, or deed-in-lieu.

“Most of the overlays have to do with adding basis points to the loan fee and to the price,” Frommeyer explains. They can also:
Increase the required downpayment.

Decide you have to wait two years instead of one.
Ask you to prove you’ve corrected your financial problems.
“They’ll probably ask for a written letter from the consumer to explain the previous problems and what they’re doing to solve the previous problems,” he says.

Credit Score Could Hold You Back
Regardless of the changes, if you were hurt by the recession you still may not qualify for a new mortgage because your financial troubles, especially a foreclosure, likely lowered your credit score.

How low is too low? In July 2013, the average FICO score for all closed first mortgages was 737, while the average credit score on denied loans was 702, according to Ellie Mae, which sells electronic mortgage origination systems. Credit scores go up to 850.

If you’re ready to become a homeowner again:
1. Check your credit reports for free.
2. Pay about $20 to get your FICO score. Credit scores aren’t included in your government-mandated free credit report, and the score you pay for may not even be the exact credit score lenders see. But it can help you decide if your credit will hold you back from getting a mortgage.
3. If your score is too low for you to get a mortgage right now, fix any mistakes.
4. Work to improve your credit score.

Call/Text or Email or Me For More Details: 708-966-9065 – Regina@ReginaWallace.com

Foreclosure is just a one-time event—with discipline and perseverance, you can get a mortgage and become a homeowner again.

11 Thursday Jul 2013

Posted by Regina Wallace in Foreclosure, Home Buyers, Homeowners, Uncategorized

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Tags

Foreclosure, Home Buyers, Prospect Equities Inc., unpaid debt

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It won’t be easy to obtain a mortgage after foreclosure. But with enough time, discipline, and desire, you can own your own home again. Here’s what you need to do:

1. Stick with a job after foreclosure

Did you fall into foreclosure because of the lack of a steady job? If you did, the first step toward homeownership after foreclosure is finding and holding one. And if you already have one—stick with it, unless you can move to a better one. Note that potential lenders will require stable employment before they’ll give you a new mortgage loan after a foreclosure. Even if it means taking a lower-paying job, it’s worth it.

2. Rebuild your nest egg after foreclosure

Establish a safety net. Financial planners generally recommend three to six months of living expenses in a liquid account, but since you’re coming out of foreclosure, six is a minimum to show stability and that you’re able to pay your bills—including your mortgage—for an extended period if you lose your job.

3. Raise your credit score after foreclosure

This is the hardest and most time-consuming part. After foreclosure, your credit score, according to myFICO, probably dropped by about 150 points. You’ll need to raise it back up with perseverance.

Pay bills on time and keep your credit card balances below maximum levels. The foreclosure will stay on your credit report for seven years, but if you prove your money management skills have matured, it will become less of a red mark as years go by.

Tip: Consult a housing counselor. The U.S. Department of Housing and Urban Development offers free housing counseling for distressed homeowners with a foreclosure in their past. A counselor can help you with money management and budgeting. Counseling works—an evaluation of a program in Indianapolis discovered that credit scores greatly improved because of education and counseling, and increased average borrowing power by $4,500 per family.

4. Reduce your waiting time for a mortgage after foreclosure

Normally, you would have to wait seven years after foreclosure before you can apply for a new mortgage under Fannie Mae rules. (Fannie Mae changes rules frequently. You can check the latest rules at Fannie Mae’s site.)

However, you might wait only three years if you can show extenuating circumstances for your foreclosure, which are defined as “events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations.” These include:

  • Losing a job
  • Getting divorced
  • Having unexpected medical expenses

There’s one last alternative if waiting isn’t your thing—you can obtain seller financing, essentially bypassing the traditional mortgage. If both parties are amenable, you can enter into a lease with an option to buy, or take a mortgage directly from the seller. You’ll most likely have to show some hefty reserve funds, but if you’ve turned around your financial situation quickly after your foreclosure, it’s worth a shot to deal directly with the seller.

Keep in mind that sellers may be motivated to agree to this if they need to sell and the potential buyers they’ve met with can’t obtain a conventional mortgage—perhaps because they’ve been through foreclosures, too.

5. Be honest about your foreclosure

When you’re ready to apply for your new mortgage, don’t try to hide your foreclosure. On the contrary, be proactive and reveal the steps you’ve taken to remedy the problems that led to your foreclosure.

Tip: Try a mortgage broker, who can work with a variety of lenders to find you a loan. When you work directly with a retail lender, like a bank, they have a limited pool of loans to offer you. But a good mortgage broker—one with a vast network of lenders or has many options, and may be able to find a mortgage solution if the foreclosure in your past is creating challenges in obtaining one.

If you stay disciplined and positive, the American dream—obtaining a mortgage and owning a home of your own—can, indeed, be yours again. Even after foreclosure.

Contact me for help getting started: Regina@ReginaWallace.com or 708-966-9065

41.710870 -87.758110

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