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Posts Tagged ‘Mortgage’

Image: Wikimedia Commons

Image: Wikimedia Commons

People often assume that once their mortgage loan is approved, they’re finished with the credit check process from their lender. However, this is not the case. Since 2010, Fannie Mae has required lenders to re-check a borrower’s credit just before closing the mortgage. Taking on additional credit obligations between the time of their loan approval and closing may cause serious issues for borrower. These issues include the lender increasing the interest rate or, in the worst case, denying the loan altogether. This situation will most likely affect those who barely qualified for the mortgage loan in the first place. Taking out additional credit after mortgage approval but before closing may tip this person’s debt-to-income ratio over that required for the loan. In order to avoid this issue, the bottom line is to not take on any additional credit obligations until after the closing of your mortgage loan. See more on this issue in this New York Times article by clicking here.

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Image: KCM Blog

Image: KCM Blog

Let’s consider some trends which indicate now might in fact be the time to buy. Two factors determine the “cost” of a home: the sales price and mortgage interest rate. As those factors rise, clearly so does the cost of buying a home. What’s happening in the current market? First, the trend in nearly every market seems to be rising prices. No, we’re not seeing the crazy bubble of a few years ago, but it appears we are seeing an increasing momentum in recovery from the crash. Second, mortgage interest rates, while still low, are continuing to rise – and all experts are predicting this trend to continue. As these two factors climb, so does the “cost” to purchase a home. Take a look at the KCM Blog here for a great example of the difference in cost today from just one year ago. If you’re thinking about buying or selling, call me today so we can meet to discuss your particular situation and develop a game plan to meet your goals.

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Zombies Are Here (Image: Wikimedia Commons)

Zombies Are Here (Image: Wikimedia Commons)

The “course corrections” (to put it mildly) of the real estate market over the last few years has introduced several new terms to our everyday real estate lexicon. Among these are terms like “distressed property,” “short sale,” “shadow inventory,” “upside down,” and “under water.” Here are a couple more new terms: “zombie homes” and “boomerang buyers.”

“Zombie homes” or “zombie foreclosures” refer to a property abandoned by the homeowner prior to the lender gaining possession of the property through foreclosure. In more than a few cases, homeowners receive a notice of sale from their lender, prompting them to move out under the (mistaken) belief that the lender has assumed ownership of the home. However, until the lender formally takes possession of the property at the conclusion of the foreclosure process, the homeowner remains legally responsible for the property. This is clearly a serious issue. Even more serious are the cases where the lender never actually takes possession of the home and the owner only learns about the situation years after – all the while still remaining legally responsible for the property.

If you’re having trouble making your payments, don’t wait for the situation to become completely out-of-hand. Sometimes a short sale is a good solution to the problem. Seek the assistance of competent real estate and legal professionals who can offer sound advice and assistance.

Our other “new” term, “boomerang buyers,” refers someone who lost a property to foreclosure, short sale, or bankruptcy, but is now once again eligible for a new mortgage. Expect to see this demographic continue to grow as those who suffered through our recent real estate mess are once again able to return to the home ownership market.

If you happen to be a “boomerang buyer” interested in returning to home ownership, please feel free to get in touch with me. I’d be happy to help put you in touch with lenders who can consult with you regarding your situation and your options.

(Source: The KCM Blog)

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