It is possible to negotiate with creditors to remove negative information from your credit report. Under the Fair Credit Reporting Act (FCRA), creditors are allowed—not required—to report your credit history. Tell the creditor that you want to clean up your credit report, and ask for help.
If you've been paying your bills on time, ask the creditor to delete negative information to better reflect your current ability to pay. If the account is delinquent, charged off or in collection, find out where it's located and try to negotiate a settlement either by:
1. Offering a lump sum payment in exchange for the creditor removing any negative statements from your credit report.
2. Offering a payment plan where you agree to make monthly payments until the account is paid and the creditor agrees to remove any negative statements from your credit report upon completion of the payments.
*Source: True Credit Newsletter October 2009 Trans Union*
Wednesday, October 14, 2009
Wednesday, October 7, 2009
Home Purchase Financing Options in Case you want to Know
HomeStyle® Renovation - The Conventional Alternative to an FHA 203k
With all of the foreclosures, there has definitely been a demand for rehabilitation loans to help homeowners not only purchase but make improvements to the home they are purchasing. Many have turned to the FHA 203k program which can include the amount of the repairs in the total loan amount. Your payment is based on the total loan amount,for example: you buy a home and your loan is for for $100,000, and there are $50,000 in repairs. Under this program you can finance the $50,000 and your payment is based on the $150,00 loan amount. However, the 203k program has limitations not found with Fannie Mae's Homestyle Renovation loan.
What types of properties qualify for a Homestyle Renovation Loan?
Owner Occupied, Second Homes and Investment Properties are all eligible. Manufactured Homes are not eligible for this product. Owner Occupied properties are for 1-4 units. Second Homes and Investment Properties are for 1-unit properties only.
How much of a down payment is required?
1-2 unit Owner Occupied and 1 unit Second Homes are eligible for a 5% down payment. 3-4 unit Owner Occupied and Investment Properties require a 20% down payment. Down payments less than 20% are subject to mortgage insurance availability.
Are there any limitations to the amount of improvements that can be financed into the loan?
The maximum amount of improvements allowed is 50% of the estimated value of the home taking into account the improvements to be made.
Are the types of repairs allowed restricted to only certain items?
No. Fannie Mae does not limit what the renovations can be. However, the renovations must increase the value of the home to be eligible.
How are costs of renovations determined and is a contractor required?
Costs of renovations are documented via the contractors’ itemized bid for the work to be completed and by the plans and specifications provided by the contractor. "Do it yourself" projects are allowed provided the cost of improvements does not exceed 10% of the as completed value of the property and the homeowner is able to show they are reasonably qualified to do the work. Not all lenders will allow "Do it yourself".
How are the construction funds disbursed and what are my payments during the rehab?
At the time of closing, the loan is fully advanced with construction funds being held by the lender. The funds are distributed by the lender upon completion of the work and are subject to inspection and title update. Payments are full P&I(principal & interest) payments from day one. Unlike a traditional construction loan, there are no “interest only” payments during construction; clients begin making the complete payment even though the entire loan may not be disbursed yet. Clients who cannot immediately occupy the home can in some cases, finance a payment reserve to cover mortgage payments while they are unable to occupy the home.
With all of the foreclosures, there has definitely been a demand for rehabilitation loans to help homeowners not only purchase but make improvements to the home they are purchasing. Many have turned to the FHA 203k program which can include the amount of the repairs in the total loan amount. Your payment is based on the total loan amount,for example: you buy a home and your loan is for for $100,000, and there are $50,000 in repairs. Under this program you can finance the $50,000 and your payment is based on the $150,00 loan amount. However, the 203k program has limitations not found with Fannie Mae's Homestyle Renovation loan.
What types of properties qualify for a Homestyle Renovation Loan?
Owner Occupied, Second Homes and Investment Properties are all eligible. Manufactured Homes are not eligible for this product. Owner Occupied properties are for 1-4 units. Second Homes and Investment Properties are for 1-unit properties only.
How much of a down payment is required?
1-2 unit Owner Occupied and 1 unit Second Homes are eligible for a 5% down payment. 3-4 unit Owner Occupied and Investment Properties require a 20% down payment. Down payments less than 20% are subject to mortgage insurance availability.
Are there any limitations to the amount of improvements that can be financed into the loan?
The maximum amount of improvements allowed is 50% of the estimated value of the home taking into account the improvements to be made.
Are the types of repairs allowed restricted to only certain items?
No. Fannie Mae does not limit what the renovations can be. However, the renovations must increase the value of the home to be eligible.
How are costs of renovations determined and is a contractor required?
Costs of renovations are documented via the contractors’ itemized bid for the work to be completed and by the plans and specifications provided by the contractor. "Do it yourself" projects are allowed provided the cost of improvements does not exceed 10% of the as completed value of the property and the homeowner is able to show they are reasonably qualified to do the work. Not all lenders will allow "Do it yourself".
How are the construction funds disbursed and what are my payments during the rehab?
At the time of closing, the loan is fully advanced with construction funds being held by the lender. The funds are distributed by the lender upon completion of the work and are subject to inspection and title update. Payments are full P&I(principal & interest) payments from day one. Unlike a traditional construction loan, there are no “interest only” payments during construction; clients begin making the complete payment even though the entire loan may not be disbursed yet. Clients who cannot immediately occupy the home can in some cases, finance a payment reserve to cover mortgage payments while they are unable to occupy the home.
Tax Credt for the First time Homebuyer
What You Need to Know About the $8,000 First Time Home Buyer Tax Credit
Who Qualifies for the Tax Credit?
Never owned a home. Have not owned a home within the last 3 years--determined by the HUD- 1 date when previous home was sold Purchased a home to be a primary residence between January 1 and November 30, 2009. Owned a rental property or vacation home which was not used as a primary residence over the last 3 years. If married and one person owned a home within the last 3 years, the other did not, they do not qualify. If unmarried and one person owned a home within last 3 years and other did not, they can "designate" the tax credit to the one who is considered the FTHB. If parents cosign on a mortgage (and own a home) and the child is a FTBH, they are eligible for the tax credit. Non-US Citizens may qualify if they meet resident-alien status. Revenue or Housing Bond financing are eligible for tax credits.
Types of Properties:
Primary Residence – Single family, 2-4 units (must occupy one unit) town homes, condos, manufactured homes, mobile homes and houseboats.
New Construction – "Purchase Date" is the date the owner occupies the home (between Jan 1 and Nov. 30, 2009) Note: They could have owned land and are in the process of building.
Income Limits:
$75,000 Single Person (Partial Credit up to $95,000)
$150,000 Married Couple (Partial Credit up to $170,000)
Based on Adjusted Gross Income (AGI) line on IRS Form 1040, 1040A or 1040EZ
Amount of Credit
10% of Sales price
Up to Maximum of $8000
Partial Tax Credit if income exceeds $75,000 or $150,000
Repayment Tax Credit-If sold within 3 years, the entire tax credit needs to be repaid! After 3 years, no repayment is due.
Buyers should check with a tax advisor on how it will affect their individual tax returns.
Sunday, September 27, 2009
The Housing Hub-Bub Rub
Welcome!
This being my first official Blogging effort and post I felt it should contain opinion and insights relative to what I know best. Real Estate Lending.
By Now you or someone you know has been affected by the backlash of economic issues facing
the country. Also, the rise of more predatory practices in the home ownership arena particularly
those facing foreclosure and or struggling to stay out of foreclosure. It seems that the last decade or so has illuminated the character defect genome known as "the greedy-deceit sydrome". Granted, I am not anywhere near a doctor or scientist and do not profess to have any psycho-social abilities to figure out the who and the why of it all. However, when you do the reverse math of greed versus need, someone forgot to carry the 1.
Yes, there is a need for affordable housing but at what costs? The majority of those who read at least the headlines of current events know that home ownership is one of the major keys to sustaining the infrastucture and economic viability of our communities. Obviously, the last 4-5 yrs of "fog the mirror-sign on the line " concept proved to be a crippling departure from buy what you can afford, not what you can finance.
Last but not least, is the need now to modify the struggling homeowners' loan terms to provide some relief and minimize the down field impact of deteriorating neighborhoods and property tax revenue loss. Well, I could go on but I want to see how this plays out with whomever decides to read it.
My next post will offer more on some of the options available and pitfalls to watch out for.
This being my first official Blogging effort and post I felt it should contain opinion and insights relative to what I know best. Real Estate Lending.
By Now you or someone you know has been affected by the backlash of economic issues facing
the country. Also, the rise of more predatory practices in the home ownership arena particularly
those facing foreclosure and or struggling to stay out of foreclosure. It seems that the last decade or so has illuminated the character defect genome known as "the greedy-deceit sydrome". Granted, I am not anywhere near a doctor or scientist and do not profess to have any psycho-social abilities to figure out the who and the why of it all. However, when you do the reverse math of greed versus need, someone forgot to carry the 1.
Yes, there is a need for affordable housing but at what costs? The majority of those who read at least the headlines of current events know that home ownership is one of the major keys to sustaining the infrastucture and economic viability of our communities. Obviously, the last 4-5 yrs of "fog the mirror-sign on the line " concept proved to be a crippling departure from buy what you can afford, not what you can finance.
Last but not least, is the need now to modify the struggling homeowners' loan terms to provide some relief and minimize the down field impact of deteriorating neighborhoods and property tax revenue loss. Well, I could go on but I want to see how this plays out with whomever decides to read it.
My next post will offer more on some of the options available and pitfalls to watch out for.
Subscribe to:
Posts (Atom)