Knowing when a property is actually real estate owned, and when it is merely a foreclosure is paramount to finding the best deals on property. Prior to the bank buying the property, the buyer will default on their mortgage and the property will be placed on sale to the public via auction. This property is now a foreclosed property and will be sold at a discounted price to the public.
If the home does not sell for the price that the bank wants, the lender will then buy back the property in order to avoid selling it for less than the market value. At this point, the property becomes REO property and can offer significant savings to you as a buyer.
Banks are not in the business of owning property, they are in the business of making money. Once a property becomes REO property, the bank will begin the process of listing the property for sale. A typical real estate owned home can sell for almost 20% off market value.
Because the lender wants to get rid of the property as soon as possible, they are far more willing to work with potential buyers. Generally, any taxes or debts due will be mended by the lender and they will also evict any current tenants to make the buying process easier for buyers.
First time buyers are ideal candidates for REO property purchases. They are able to obtain their first home at a significant savings and with none of the difficulties typical of traditional real estate transactions.
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Crowley & Cummings are real estate attorneys located in Dedham MA specializing in real estate closings, title examinations, complex title issues, purchase & sale agreements, condo conversions, and other related services. They service lenders and mortgage brokers, real estate agents, as well as buyers and sellers in Massachusetts, New England, and throughout the US. To learn more visit them online at www.CrowleyCummings.com.
Wednesday, February 2, 2011
Tuesday, January 25, 2011
Mortgage Loans in 2011
Mortgage rates are at record lows for both first time homeowners, as well as existing homeowners. What this means for you as a buyer however, is that your chances of securing a home loan this year could be better than ever if you have your ducks in a row and have done your financial homework.
So what will it take to get a mortgage in 2011? The same stuff it takes to get a mortgage in any other year, starting with your credit score. It isn't that you can't get a mortgage with a poor credit score, it is that your mortgage rate is going to make it impossible for you to afford to pay anything but your mortgage. And that is where current homeowners facing foreclosure found themselves at the time they purchased their homes, high interest rates because their credit score was too low to get the better rate. Higher monthly payments, resulting in less available every month for other expenses.
Credit score matters if you want the best mortgage rate. In spite of the common misconception that repeated inquiries into your credit score will not effect it, your score will fall with every inquiry. However, if you have multiple lenders making inquiries within a few weeks together, the hit will be counted as one and the drop will not be as severe.
This brings us to the next point, do the research for the best lender. You can shop around for mortgage rates and lenders, do it all within a set time frame, and get the information you need with a minimal decrease in your credit score.
While you're researching, make sure that you've already determined your borrowing budget. If you're looking for a home to buy, you should already have a budget that you adhere to, and have a savings plan in place as well. In other words, you are financially savvy enough to understand that your budget might very well be the most important determining factor in whether you will buy a home or not; can you afford it?
If you are in the market for a refinance loan, consider asking your lender to rewrite the terms of the new loan to play out over the life of the old one rather than restarting at the first year mark again. If you have already paid 10 years into your current mortgage and only have 20 to go, see if you can have the refinance loan spread over the same 20 years as well.
In the event that you do not have any savings, or are not in a position to put a down payment on your mortgage, consider a no-closing-cost refi, or applying for government assistance if you qualify. And if your loan is for less than $100,000 consider acting early in the year rather than later, when a government regulation could place you last on the list for lenders looking to make more money on bigger loans.
Make extra payments all through the year whenever you can, not just at the end of the year. You can reduce substantial time off the life of your mortgage this way just by making a few extra payments a year. Alternatively, if you are having trouble making your payments, or if you are behind on your mortgage payment, be sure to contact a HUD certified financial or mortgage counselor immediately for help and information, and to avoid the risk of foreclosure.
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Crowley & Cummings are real estate attorneys located in Dedham MA specializing in real estate closings, title examinations, complex title issues, purchase & sale agreements, condo conversions, and other related services. They service lenders and mortgage brokers, real estate agents, as well as buyers and sellers in Massachusetts, New England, and throughout the US. To learn more visit them online at www.CrowleyCummings.com.
So what will it take to get a mortgage in 2011? The same stuff it takes to get a mortgage in any other year, starting with your credit score. It isn't that you can't get a mortgage with a poor credit score, it is that your mortgage rate is going to make it impossible for you to afford to pay anything but your mortgage. And that is where current homeowners facing foreclosure found themselves at the time they purchased their homes, high interest rates because their credit score was too low to get the better rate. Higher monthly payments, resulting in less available every month for other expenses.
Credit score matters if you want the best mortgage rate. In spite of the common misconception that repeated inquiries into your credit score will not effect it, your score will fall with every inquiry. However, if you have multiple lenders making inquiries within a few weeks together, the hit will be counted as one and the drop will not be as severe.
This brings us to the next point, do the research for the best lender. You can shop around for mortgage rates and lenders, do it all within a set time frame, and get the information you need with a minimal decrease in your credit score.
While you're researching, make sure that you've already determined your borrowing budget. If you're looking for a home to buy, you should already have a budget that you adhere to, and have a savings plan in place as well. In other words, you are financially savvy enough to understand that your budget might very well be the most important determining factor in whether you will buy a home or not; can you afford it?
If you are in the market for a refinance loan, consider asking your lender to rewrite the terms of the new loan to play out over the life of the old one rather than restarting at the first year mark again. If you have already paid 10 years into your current mortgage and only have 20 to go, see if you can have the refinance loan spread over the same 20 years as well.
In the event that you do not have any savings, or are not in a position to put a down payment on your mortgage, consider a no-closing-cost refi, or applying for government assistance if you qualify. And if your loan is for less than $100,000 consider acting early in the year rather than later, when a government regulation could place you last on the list for lenders looking to make more money on bigger loans.
Make extra payments all through the year whenever you can, not just at the end of the year. You can reduce substantial time off the life of your mortgage this way just by making a few extra payments a year. Alternatively, if you are having trouble making your payments, or if you are behind on your mortgage payment, be sure to contact a HUD certified financial or mortgage counselor immediately for help and information, and to avoid the risk of foreclosure.
------------------------------------------
Crowley & Cummings are real estate attorneys located in Dedham MA specializing in real estate closings, title examinations, complex title issues, purchase & sale agreements, condo conversions, and other related services. They service lenders and mortgage brokers, real estate agents, as well as buyers and sellers in Massachusetts, New England, and throughout the US. To learn more visit them online at www.CrowleyCummings.com.
Thursday, January 20, 2011
Landlord Tenant Issues With Rental Property and Taxes
Many investors took advantage of the lower prices for real estate in combination with the lower interest rates and purchased investment and rental property. Unlike in the past, the lower rates and prices promise a faster return on their investment, with equity returns sooner rather than later.
If this is your first turn as a landlord, there are some tricky tax situations that you will need to pay attention to during your first year. Even a seasoned landlord will have to keep well informed of the various tax changes from year to year.
For instance, any rental income that you receive for the year will need to be included as income. This amount will include any deposits, non-refundable deposits, first and last month's rent, and any advance rent payments. It doesn't matter when the advance payments are for, you must count them for the year you received them.
Some items that may be a little trickier are items that your tenant does to maintain the property for a discounted rental amount. You still have to claim the value of the task performed as income, and then deduct it as well as an expense. You must also claim as income any expenses paid by your tenant. If your tenant deducts the amount from their rent, you will need to claim the full rental amount, and then deduct the expense.
A less common situation is where a tenant may pay you to exercise an opt out clause in a lease. Again, this is rental income, as are lease with option to buy option payments.
Two small tax breaks are included for renting out space in your residence. You needn't disclose the rent you receive, as long as it is for less than 15 days.
These are the places that the IRS loves to catch people cutting corners, so do yourself a favor and give them no reasons to dig deeper. Consult your tax professional and your real estate attorney for advice in all legal tax and landlord tenant matters.
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Crowley & Cummings are real estate attorneys located in Dedham MA specializing in real estate closings, title examinations, complex title issues, purchase & sale agreements, condo conversions, and other related services. They service lenders and mortgage brokers, real estate agents, as well as buyers and sellers in Massachusetts, New England, and throughout the US. To learn more visit them online at www.CrowleyCummings.com.
If this is your first turn as a landlord, there are some tricky tax situations that you will need to pay attention to during your first year. Even a seasoned landlord will have to keep well informed of the various tax changes from year to year.
For instance, any rental income that you receive for the year will need to be included as income. This amount will include any deposits, non-refundable deposits, first and last month's rent, and any advance rent payments. It doesn't matter when the advance payments are for, you must count them for the year you received them.
Some items that may be a little trickier are items that your tenant does to maintain the property for a discounted rental amount. You still have to claim the value of the task performed as income, and then deduct it as well as an expense. You must also claim as income any expenses paid by your tenant. If your tenant deducts the amount from their rent, you will need to claim the full rental amount, and then deduct the expense.
A less common situation is where a tenant may pay you to exercise an opt out clause in a lease. Again, this is rental income, as are lease with option to buy option payments.
Two small tax breaks are included for renting out space in your residence. You needn't disclose the rent you receive, as long as it is for less than 15 days.
These are the places that the IRS loves to catch people cutting corners, so do yourself a favor and give them no reasons to dig deeper. Consult your tax professional and your real estate attorney for advice in all legal tax and landlord tenant matters.
------------------------------------------
Crowley & Cummings are real estate attorneys located in Dedham MA specializing in real estate closings, title examinations, complex title issues, purchase & sale agreements, condo conversions, and other related services. They service lenders and mortgage brokers, real estate agents, as well as buyers and sellers in Massachusetts, New England, and throughout the US. To learn more visit them online at www.CrowleyCummings.com.
Friday, January 14, 2011
Federal Mortgage Rule Unpopular with Homeowners
Foreclosures in MA are part of the overall foreclosure crisis in America. Consumers at present have 3 years to argue their case to lenders when there is fraud or deceit involved. The homeowner is still required to pay their mortgage however, even if less than judicious circumstances exist in its processing.
The following article touches on the subject of Foreclosures and homeowners in general.
Consumers, Senators Criticize Fed’s Proposed Mortgage Rule
by Credit.com on 01/06/2011
Under a new proposal from the Federal Reserve Board, which would amend the consumer protection laws passed over the summer, consumers would have to pay off a home loan even after they received bad information, before it could be terminated, according to a report from Dow Jones Newswires. Currently, Americans have three years to argue that lenders broke consumer protection laws, and perhaps force lenders to refinance or modify the loan.
“In this time of record foreclosures and reports of systemic problems with the operations of the largest mortgage servicers, the proposed revisions are unfortunate and unnecessary,” a group of Democratic U.S. Senators wrote to the Fed, according to the report. “The mortgage market needs greater oversight and accountability to restore borrower confidence lost in the mortgage crisis. The proposed rules would undermine this goal.”
The letter was signed by Senators Sherrod Brown of Ohio, Tim Johnson of South Dakota, and former Senator Chris Dodd, who used to head the Senate Banking Committee, the report said. A Fed spokeswoman told the news organization that the lawmakers’ suggestion will be taken under advisement.
Many consumers have been victimized by improperly handled mortgages over the last few years, and many have faced foreclosure as a result.
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Crowley & Cummings are real estate attorneys located in Dedham MA specializing in real estate closings, title examinations, complex title issues, purchase & sale agreements, condo conversions, and other related services. They service lenders and mortgage brokers, real estate agents, as well as buyers and sellers in Massachusetts, New England, and throughout the US. To learn more visit them online at www.CrowleyCummings.com.
The following article touches on the subject of Foreclosures and homeowners in general.
Consumers, Senators Criticize Fed’s Proposed Mortgage Rule
by Credit.com on 01/06/2011
Under a new proposal from the Federal Reserve Board, which would amend the consumer protection laws passed over the summer, consumers would have to pay off a home loan even after they received bad information, before it could be terminated, according to a report from Dow Jones Newswires. Currently, Americans have three years to argue that lenders broke consumer protection laws, and perhaps force lenders to refinance or modify the loan.
“In this time of record foreclosures and reports of systemic problems with the operations of the largest mortgage servicers, the proposed revisions are unfortunate and unnecessary,” a group of Democratic U.S. Senators wrote to the Fed, according to the report. “The mortgage market needs greater oversight and accountability to restore borrower confidence lost in the mortgage crisis. The proposed rules would undermine this goal.”
The letter was signed by Senators Sherrod Brown of Ohio, Tim Johnson of South Dakota, and former Senator Chris Dodd, who used to head the Senate Banking Committee, the report said. A Fed spokeswoman told the news organization that the lawmakers’ suggestion will be taken under advisement.
Many consumers have been victimized by improperly handled mortgages over the last few years, and many have faced foreclosure as a result.
------------------------------------------
Crowley & Cummings are real estate attorneys located in Dedham MA specializing in real estate closings, title examinations, complex title issues, purchase & sale agreements, condo conversions, and other related services. They service lenders and mortgage brokers, real estate agents, as well as buyers and sellers in Massachusetts, New England, and throughout the US. To learn more visit them online at www.CrowleyCummings.com.
Tuesday, January 11, 2011
Foreclosure Alternatives for the Unemployed
Several options may exist for homeowners who have made their mortgage payments on time and easily in the past, but who are suddenly unemployed and unable to make their payments any longer.
One such option is the short sale. Under the provisions of a short sale, the homeowner would be allowed to sell the home for less than what is currently owed on the mortgage, and still not incur any responsibility for the remaining debt.
Another option that has gained in popularity is a deed in lieu of foreclosure agreement with the lender. Under this application, the homeowner has been unable to find a buyer for the property and instead offers to give the house back to the bank and walk away rather than continue to make payments or move through the foreclosure process.
In addition to these two options of course there are more standard foreclosure prevention routes to follow. The Federal Housing Finance Agency offers loan modifications through Home Affordable Modification Programs supported and created by the Obama Administration in an effort to help curb foreclosures for homeowners.
Normally, homeowners would have the option to refinance and modify their mortgage according to their ability to pay and income changes. When a homeowner is unemployed however, those options decrease substantially.
If you are facing foreclosure due to unemployment or other reasons, contact a mortgage finance professional for assistance immediately. The programs are changing every day and you will not be aware of what is available unless you speak to someone who is familiar with mortgage financing options.
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Crowley & Cummings are real estate attorneys located in Dedham MA specializing in real estate closings, title examinations, complex title issues, purchase & sale agreements, condo conversions, and other related services. They service lenders and mortgage brokers, real estate agents, as well as buyers and sellers in Massachusetts, New England, and throughout the US. To learn more visit them online at www.CrowleyCummings.com.
Monday, January 3, 2011
Homeowner History Determining New Approach for Mortgage Lenders
Owing to the recent housing crisis, there are very few homeowners left who are not extremely savvy about their financial situations and how they spend their money. This new breed of homeowner is quite aware of how the government plans work, how much the bank is going to charge for their mortgage loan, and what all the fine print, including the many varied fees and disclosures, mean as a bottom line for him as a consumer.
The vast differences in knowledge between the homeowner of today and the homeowner of even as little as 5 years ago, cannot be ignored by lenders. It is time for real estate professionals of all kinds to take a new approach that focuses more on the consumer, and their long-term financial goals.
The lending process must be accurately and clearly explained immediately with a fully transparent lender if you hope to win consumers' business in the current market. Nothing less than full disclosure will do.
Although a client can obtain a list of numbers from a website that will tell them how much his mortgage payment will be, if the calculator is not up to date, he will only be obtaining generic numbers... not personalized service.
Contacting clients personally, returning phone call requests for refinance quotes promptly, offering complete transparency, and helping consumers reach their long term financial goals are the benchmarks of a successful real estate business, where the customer is the main focus.
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Crowley & Cummings are real estate attorneys located in Dedham MA specializing in real estate closings, title examinations, complex title issues, purchase & sale agreements, condo conversions, and other related services. They service lenders and mortgage brokers, real estate agents, as well as buyers and sellers in Massachusetts, New England, and throughout the US. To learn more visit them online at www.CrowleyCummings.com.
The vast differences in knowledge between the homeowner of today and the homeowner of even as little as 5 years ago, cannot be ignored by lenders. It is time for real estate professionals of all kinds to take a new approach that focuses more on the consumer, and their long-term financial goals.
The lending process must be accurately and clearly explained immediately with a fully transparent lender if you hope to win consumers' business in the current market. Nothing less than full disclosure will do.
Although a client can obtain a list of numbers from a website that will tell them how much his mortgage payment will be, if the calculator is not up to date, he will only be obtaining generic numbers... not personalized service.
Contacting clients personally, returning phone call requests for refinance quotes promptly, offering complete transparency, and helping consumers reach their long term financial goals are the benchmarks of a successful real estate business, where the customer is the main focus.
-------------------------------------------------------------------------------------------
Crowley & Cummings are real estate attorneys located in Dedham MA specializing in real estate closings, title examinations, complex title issues, purchase & sale agreements, condo conversions, and other related services. They service lenders and mortgage brokers, real estate agents, as well as buyers and sellers in Massachusetts, New England, and throughout the US. To learn more visit them online at www.CrowleyCummings.com.
Thursday, December 23, 2010
Home Owner Tax Breaks Often Overlooked
State Sales tax on materials purchased to repair your home...
Depending upon where you live, if your state has sales tax already this deduction could amount to an even larger chunk of money as it gets added on top of any state income tax deduction. You can visit the IRS website for help using their online calculator to figure this deduction.
Refinancing points...
In contrast to when you purchase a home and are allowed a single large deduction for the mortgage, when you refinance, you will deduct over the life of the loan. So for instance, your annual deduction on a 20 year loan, will be 1/20th of the points.
It may not seem like very much, but it is important to deduct it anyway. If you sell the house before the refinance loan period is completed, you are allowed to deduct any remaining points all at once upon filing after the sale. Also, if you refinance your refinance loan, any points you incur under the new loan, will also be amortized over the life of the loan in this way.
Energy saving home improvements...
Over the past two years of 2009 and 2010, if you have made home improvements, you are entitled to a full deduction of up to $1,500. The credit can be applied toward qualifying window and door upgrades, heating elements like biomass fuel stoves or high efficiency furnaces, and water and air quality upgrades.
For homeowners installing residential alternative energy components that qualify, you can deduct a full 30% of the cost without limit and until the year 2016.
Home buyer credits...
Although this credit would be hard to miss, it pays to research the deadline extensions to see if you can qualify to take any of the myriad home-buyer tax credits that are currently available under the many programs offered by the government.
If you are unsure whether you qualify for any of these savings, talk to an experience professional for more information.
------------------------------------------
Crowley & Cummings are real estate attorneys located in Dedham MA specializing in real estate closings, title examinations, complex title issues, purchase & sale agreements, condo conversions, and other related services. They service lenders and mortgage brokers, real estate agents, as well as buyers and sellers in Massachusetts, New England, and throughout the US. To learn more visit them online at www.CrowleyCummings.com.
Depending upon where you live, if your state has sales tax already this deduction could amount to an even larger chunk of money as it gets added on top of any state income tax deduction. You can visit the IRS website for help using their online calculator to figure this deduction.
Refinancing points...
In contrast to when you purchase a home and are allowed a single large deduction for the mortgage, when you refinance, you will deduct over the life of the loan. So for instance, your annual deduction on a 20 year loan, will be 1/20th of the points.
It may not seem like very much, but it is important to deduct it anyway. If you sell the house before the refinance loan period is completed, you are allowed to deduct any remaining points all at once upon filing after the sale. Also, if you refinance your refinance loan, any points you incur under the new loan, will also be amortized over the life of the loan in this way.
Energy saving home improvements...
Over the past two years of 2009 and 2010, if you have made home improvements, you are entitled to a full deduction of up to $1,500. The credit can be applied toward qualifying window and door upgrades, heating elements like biomass fuel stoves or high efficiency furnaces, and water and air quality upgrades.
For homeowners installing residential alternative energy components that qualify, you can deduct a full 30% of the cost without limit and until the year 2016.
Home buyer credits...
Although this credit would be hard to miss, it pays to research the deadline extensions to see if you can qualify to take any of the myriad home-buyer tax credits that are currently available under the many programs offered by the government.
If you are unsure whether you qualify for any of these savings, talk to an experience professional for more information.
------------------------------------------
Crowley & Cummings are real estate attorneys located in Dedham MA specializing in real estate closings, title examinations, complex title issues, purchase & sale agreements, condo conversions, and other related services. They service lenders and mortgage brokers, real estate agents, as well as buyers and sellers in Massachusetts, New England, and throughout the US. To learn more visit them online at www.CrowleyCummings.com.
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