Wed 30th Sep, 2009

The Short Sale Process – Foreclosure Protection?

Posted in mortgages at 10:16 am by Anthony Y. Mauer

The short sale process is long and difficult. The homeowner is in a situation where their mortgage value is higher than that of their home – the short sale definition. Most of the time homeowners comes very close to foreclosing before admitting that the time has come to begin the short sale process.

Before initiating the short sale process, both sides must agree to it. It is a contract between two parties as to exactly how the debt will be settled – with all of the various aspects of home ownership dealt with. Avoiding foreclosure is probably the consideration with the highest priority to the homeowner.

After agreeing to settle through this process, the two parties must then agree on the various aspects of the short sale – and there are many. Among many other complex issues, they must decide on the selling price of the home, the amount of debt to be forgiven, property taxes, insolvency issues, various fees, and the purchase agreement. For these reasons expert help is an absolute necessity. Do NOT attempt to handle a bank short sale on your own!

The homeowner will need to complete a document known as the hardship letter to verify how they ended up in the short sale process. The statements in this document will be verified by various financial documents provided by the homeowner. It is in this manner that the lender will verify how the borrower ended up being so dangerously close to foreclosure.

The bank will then assess the fair market value of the home and work with appraisers, brokers, and real estate agents. This is done in order for the home to be appraised properly, and for the bank to recover as much as possible from the sale of the home. In the end it’s all about business, and lenders wish to keep their losses to a minimum.

If the home is sold in accordance with the agreement – then the money will be used to settle the debt. The bank is not obligated to wait any longer than they agreed to wait in the contract. They can legally proceed with foreclosure if it is not sold by the date agreed to in the contract. These issues will be clearly stated in the agreement.

If handled correctly – with professional assistance, your credit does not necessarily have to be damaged. There are many complex issues involved in the short sale process, and many people have missed deadlines dealing directly with issues relating to credit. For these reasons their credit rating was damaged. Some people have other areas of financial responsibility tangled up in their current problems and for this reason end up with damaged credit. The point is that damaged credit is not a foregone conclusion. If we follow the instruction of the experts advising us, our credit rating may well be saved..

If we successfully complete the short sale process we could very well end up with little damage. If we do it right, we could still have stable credit, no legal fees or unpaid property taxes, and no foreclosure! This would be our prize – to be in the best position humanly possible to buy another home.

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First Time Homebuyer’s Guide To Self Inspections

Posted in Property at 9:27 am by Alexandria P. Anderson

You want to avoid any major surprises when you’re considering a new home purchase so contracting with a professional home inspector can alleviate much of the stress and concerns about your prospective home early in the home buying process.

However, you aren’t required to conduct an official home inspection until after signing the initial contract, so it’s a good idea to learn as much as possible about the condition of the home by having an honest discussion with the seller, and even performing your own ‘mini’ inspection where you can check for basic structural defects or potential problems.

Most sellers will be open to having you inspect the home well before signing any type of contract, and this gives you some leverage when you are negotiating the final price. Barron’s ‘Smart Consumer’s Guide to Home Buying’ encourages all prospective homebuyers to prepare a checklist and note any problems and areas of concern as early as possible. The authors of the book explain that, “If you are thinking about buying a house that will need renovation or upgrading, the more value will be derived from your mini-inspection.”

Create a checklist that you will use in your home inspection. This will help you in taking notes of the general condition and appearance of the house. Below are important issues to include in your notes:

Learn about the age of the home – you’ll want to find out exactly when the home was built, what types of renovations or new construction took place on the home site, and if there are any architect or engineering plans available.

Inspect the house’s foundation – Check if there large cracks around the home and basement. You should also check for water or weather related damages. Ask the seller if the house ever experienced or experiences weather related problems in various seasons.

Inspect the house’s interior for flaws – Walls should be even and free of cracks. Check if you can manipulate the doors with ease. All water entry areas should function properly and keep an eye out for mold and mildew infestations. Take a note of noticeable cracks and corrosions. You might also want to take a snapshot of problems that really stand out.

Inspect the exterior of the house – Check if all windows and doors move smoothly and if these are properly insulated. Inspect the sidings of the house. Look for signs of deterioration.

Examine the heating and air conditioning system – Query the seller about the average cost of operating these systems in a month. You may need to have a new system in place if the old air conditioning system is already inefficient.

Take all the information you gathered and create a written inspection report. You may also use a digital camera or camcorder to take pictures or video clips that you can review later. Video clips and pictures will allow you to document your inspection in more detail. These visual documents may also give you additional negotiation leverage.

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When Getting More Coverage Helps You Save More

Posted in Insurance at 8:16 am by Chimezirim Gabriel Odimba

How you can reduce your insurance payments is a topic that I regularly write about. However, it’s also important that I stress that buying any policy that leaves you compromised all in the name of paying less is plain foolishness. Believe it or not, sometimes it is cheaper to buy more insurance. Let?s look at two cases…

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1. Insurance policies are sold in terms of range. That is, an insurer might sell you a policy at $0.97 per $1,000 coverage if you buy between $250,000 and $499,000 while they’ll sell $1.12 per $1,000 coverage if it’s less than $250,000.

Here, you would pay $271.60 for coverage of $280K since it falls within the $250K and $499K range. On the other hand, if you purchase $240K in coverage you’ll shell out $274.40. That means that you are paying three bucks more in premium dollars for 40 grand less of coverage.

This makes it extremely important for you to check with your insurance representative and find out how much their price is per $1,000 of coverage for varied ranges. From there you can figure out what would be best for you.

2. Liability coverage is offered on both your home and auto insurance policies. If possible, get an umbrella policy and drop or reduce the other policies. The advantage for you is that your cost will be trimmed down and you will have improved coverage.

Remember what the liability part of your home and auto insurance policies cater for: To protect you from losses you could incur because of injuries to people on/by/in your property. If someone decides to sue you then you will already have protection. But like all things in insurance, there’s a limit to the amount that is covered and your auto or homeowners’ liability coverage might even be totally inadequate.

Nevertheless, an umbrella insurance policy will typically cater fully for even the most cost-intensive of lawsuits and all you’d have to pay are very affordable premiums.

An umbrella policy is under $300 annually and you can be covered for a million dollars. Add just about $75 (that’s a total of $375) to make it $2 million coverage or even buy more for just a paltry $50 per $1 million coverage after the $2 million mark.

It would cost every bit of $300 just to raise your auto liability to $100K/$300K from $25K/$50K, that?s no where near a million or better.

Look at these two patterns that occasionally you can essentially shell out a lot less by purchasing additional coverage. And whatever you do, do NOT forget to do thorough comparison shopping. The best insurance prices can only be found by doing this.

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