If you're a homeowner facing foreclosure one very important consideration has to be: Is it better to go through short sale or foreclosure?
Here's some information from an industry expert you might find helpful.
Short sales don't hurt credit scores
Sarah Davies, vice president of VantageScore, at the Loan Modifications Conference now underway in Dallas, Texas, says restructuring plans on a mortgage, whether in the form a forbearance, modification or short sale, have a relatively insignificant effect on the consumer's credit score.
VantageScore measures the generic consumer's credit score and his or her likelihood of slipping into 90-plus day delinquencies on a scale of 501 to 990. If a servicer reduces a consumer's original loan amount from 10-to-30%, the consumer's credit score is only increased by three to 18 points, depending upon the consumer's initial standing. Borrowers in the top-tier of credit scores, averaging an 862, receive only a three-point increase. Lower tier borrowers, in the 625 range, can receive an 18-point jump. The credit score increases because the total amount of debt owed is reduced, and the borrower becomes inherently more reliable, Davies said.
However, foreclosure and bankruptcy can more severely affect the consumer's credit score. If a borrower, who maintains good credit, is foreclosed, his or her credit score can decrease by as much as 140 points. Bankruptcy for someone in good credit standing results in a reduction of 365 points from the consumer's credit and a mark on the file for seven to sometimes 10 years, Davies said
One word of caution, like everything else this can change.
For more valuable information for homeowners facing foreclosure, visit the Help for Homeowners page on our website: http://firsttimehome.us
More than 4 million people per month visit Zillow and it has become a major resource for First Time Home Buyers in their information gathering.
But what is a "Zestimate" and how can a Temecula First Time Home Buyer use it to enhance their knowledge base and still be in touch with the "real world"?
What is a "Zestimate"? (Spencer Rascoff, COO of Zillow explains)
Zestimates are calculated three times per week by computer models that try to approximate what the market value is for almost every home in the country. We crunch numbers on 70 million homes and publish those Zestimates to the website every few days.
We're very transparent about our Zestimate accuracy and we report on it quarterly on the site. We encourage agents to show the accuracy table (which can be found by clicking on "Zestimate Values & Accuracy" on the bottom of every page of the website). The accuracy table helps agents explain to clients the limitations of the Zestimate, and helps reinforce the importance that a real estate agent has in helping the client think through the value of their home.
Zestimate accuracy varies depending upon the quality of the information we have on the specific home. Also, Zestimates are more accurate on homes that are more similar to other homes that have recently sold; on the other hand, Zestimates are less accurate on more unique homes.
Keep in mind that when a home is listed for sale on Zillow, several things happen with respect to the Zestimate:
1. The Zestimate comes off the map page and is replaced with the For Sale price
2. The property attributes (e.g., # beds, # baths, sqft, etc) which were previously provided by the county are replaced by the listing information
3. Zillow recalculates the Zestimate within a few days based on the new property attributes. The For Sale price of the home is not a direct input into the Zestimate though.
4. On the listing page (aka "the home details page"), the Zestimate is removed from the top of the page and replaced with the For Sale price. The Zestimate still appears on the page, but at the very bottom. In some cases, the Zestimate doesn't appear on the listing page due to an inability to match the address from the listings feed with an existing address in our database.
For more information watch Zillow video
The castaways and crew of the USS Minnow set out on a three hour tour in September of 1964 that lasted three years (until September of 1967).
In September of 2009 we set out on a three hour tour that lasted three hours. Unlike the storm that sent the Minnow off course and into television history, our cruise was on the best day of the year (weatherwise) and we got see the sights and sounds of San Diego Harbor that not many Temecula residents see or even know about.
Did you know:
Here's the pictures of our cruise: http://temeculavalleyliving1.shutterfly.com/
We're already making plans for a return next summer!
Enjoy!
On October 10, 2009 the streets of Old Town Temecula, will once again feel some "heavy metal thunder" as hundreds of classic cars from the '30s, '40s, '50s, '60s and even '70s (I really feel old when cars from the '70s are considered classics) will be on display.
Thousands of car enthusiasts will be reliving some of those "glory days" as they check out these hot rods that they idolized as they grew up.
Here's some photos of the Rod Run from February 2009.
http://temecularodrun2009.shutterfly.com/
You have probably seen the many Buy vs Rent calculators available on the Internet, and you know what? Buy wins everytime, so the decision to buy or not buy has to be more than the financial or tax benefit.
In the last "boom" thousands of families bought and sold Real Estate solely for the "investment value" and they lost. As a result there are many potential homebuyers who shy away from taking the step, because Real Estate "just isn't a good investment anymore".
Home ownership is the cornerstone of the American Dream and there is no denying it may be the best financial investment a homebuyer will ever make, but it has to be about more than that. AND owning a home is not for everyone!
First Time Home Buyers have to ask themselves these important questions (at least)?
Here are some thoughts on when Renting is Better and when Buying is Better.
When Renting is Better
Any real estate professional can give you a number of reasons why it makes sense to buy a house. Just like everything else, IT DEPENDS on who and where YOU are in your life as well as career.
Even though your friends and family may be telling you to settle down and buy a home, there are actually times and circumstances when renting might be a better idea.
Of course as your life, changes so will the answer to the rent vs buy question.
Will you put in the time?
In any investment, there's no such thing as a sure thing. What usually makes real estate a better risk than most is time. The longer you are prepared to commit to your first home, the more like your chances of seeing it increase in value.
During the last boom, too many people bought with the expectation they could turn a tidy profit in just a few months or a year. The market changed and their home declined in value (because they bought at the top) and now they are faced with the reality of trying to sell a property before it has appreciated enough to cover the costs and commissions.
Many First Time Home Buyers bought with little or no down payment and now are facing the prospect of paying Real Estate commissions and closings costs out of their own funds. Doesn't sound pleasant, does it?
Will you like the neighborhood?
The first rule of Real Estate is Location, Location, Location! The good news is in today's market a First Time Home Buyer has more choices of neighborhoods than even one year ago.
If you are going to be living in a neighborhood for a few years, make sure it fits your wants, needs and goals.
Research suggests you take ample time to get to know the neighborhood before investing your money in a house and a neighborhood.
Many First Time Home Buyers find themselves relocating and because of the potential difference in housing prices, choose the wrong neighborhood because all they see is "I get so much more for my money here than in (pick one - L.A., Chicago, New York, etc).
A Certified First Time Homebuyer Realtor® specialist will help you find the right neighborhood and provide all the information necessary; i.e. schools, transportation, shopping, etc.
Will you keep all your commitments?
We're not just talking about financial commitments. When you buy a home, you are entering into a contract to repay the lender for a period of time. If you're not ready to take on that obligation, think twice.
Make sure you are buying for the right reasons!
Many First Time Home Buyers, spurred on perhaps by the notion of starting a new relationship which will be cemented in their new home are often forced to sell sooner than expected when those relationship plans don't work out as expected.
Unfortunately, when plans don't work out, both partners suffer the indignity of try to sell the property before it has had a chance to appreciate.
Losing money this way does nothing to help an already difficult situation. If you and your partner have any doubts, experts say it's not the time to make a major investment.
Will you be happy giving up the freedom?
Initially at least, renting is less financial pressure than buying. Paying a first and last deposit doesn't compare to the chunk of change required for a down payment on a house. Though, in today's market, with low down payment loans available the difference isn't as big as it used to be.
Renting gives you the freedom to move around without having to wait for a house to sell. Renting is lower risk, because if you need a new range or microwave, you call the landlord.
Even though rents tend to increase by 3 percent a year, unexpected maintenance costs or property tax hikes aren't part of your monthly bill.
When Buying is Better
Does shelling out that rent payment each month bug you? Over the course of five or seven years you will pay enough in rent to buy some homes. Hate the thought of a 30 YEAR mortgage?
Consider this!
The fact is, over the long term, building equity in your own property is far smarter than financing someone else's. A fixed rate mortgage also locks in your monthly rate so you know that whatever your payment is, at least it will stay the same for thirty years.
Rent, on the other hand, has the nasty habit of increasing every year. If you're already struggling to meet today's exorbitant rents in major metropolitan areas, imagine what they'll be like 10 or 15 years from now.
Tax Breaks
Probably the best reason of all to consider buying a house is the tax break. As the tax code is structured now, interest on your home mortgage is tax deductible as are property taxes. With rent, that's money down the drain.
It's as though Uncle Sam is actually helping pay for the house you buy. In fact the IRS even has a tool to help you adjust your federal withholding to soften the impact of a higher house payment. You can calculate your federal withholding benefit at www.irs.gov
When it comes time to sell, homeowners can benefit from tax-free profits on the sale of their primary residence, up to $500,000, (if they are married and filing jointly and have occupied the home for two of the last five years, Homeowners who are single or married filing separately, can enjoy tax-free profits up to $250,000.
Three-Bedroom Savings Account
Have you ever wondered why credit card applications and auto loans ask if you rent or own?In the eyes of the banking community owning a house is considered a major savings asset.
Almost all First Time Home Buyer loan programs require principal and interest payments. A portion of every mortgage payment goes toward the principal, (not a lot in the early years but it gets better over time), so the homeowner is building equity. In addition, historically home values have appreciated at an average of 5% per year. This varies from time to time and especially from market to market.
So, even as your debt to the mortgage company remains constant, what you get when you sell the house doesn't.
There are many ways to maximize the appreciation in your home, but let's get you in the right home first.
Generally, buying a home is considered a secure investment because prices usually don't go down, unless you bought at the top of the market, or next to a nuclear power plant. The longer you put off buying a house, the longer you'll miss out on appreciation, and the opportunity to build equity instead of wasting money on rent.
How much longer do you want to pay Uncle Sam more than you need to?
Personal Freedom
Aside from the money, owning a home brings freedom to create your own personal space without limits set by a landlord. When you think about it, a rental isn't really your home, it's someone else's on loan and they probably won't agree that the bathroom looks cool painted deep purple. Nor is a landlord likely to pay for such personal touches and why should you if you're only renting? Take in an episode of House Hunters on HGTV and witness the transformation you see when a First Time Home Buyer get's to express their individuality in their new home.
Are you ready to walk away from $8000?
Thanks to Audrey Arkins, Salary.com contributor
National Home Loan Advocates seeks to restore consumer confidence in the mortgage marketplace and firmly believes in the benefits of homeownership for families and our communities.
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
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