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.
Showing posts with label real estate owned property. Show all posts
Showing posts with label real estate owned property. Show all posts
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.
------------------------------------------
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.
Sunday, November 7, 2010
REO and Foreclosure Services in MA
Bank and lender owned property inventories are substantial due to the housing and foreclosure crisis that has occurred in the past decade. REO properties, are real estate owned properties that are held in ownership by the lender after a foreclosure, repossession and auction, once the title transfers to the bank.
Because the property did not sell for the minimum price at auction, unless the lender is then able to sell or transfer the property to another paying owner, the bank will have to hold the property until someone else wants to buy it.
The role of the real estate attorney in the REO property process is to work on behalf of the lender as their representative in the sale of the property. At the very least, an experienced REO attorney needs to know the ins and outs of complicated conveyancing and complex title issues, foreclosure law, and municipal regulations in the area in which the property is located.
Most lenders will maintain a Real Estate Attorney to complete their REO transactions as they are obtained, including immediate title searches and clearing any existing issues relating to the conveyance early in the process. It is not advisable to use the Foreclosure Attorney as the REO attorney however, as this can cause delays in the title search process, and result in further losses and delays for the lender.
------------------------------------------------------------------------------------------
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.
Because the property did not sell for the minimum price at auction, unless the lender is then able to sell or transfer the property to another paying owner, the bank will have to hold the property until someone else wants to buy it.
The role of the real estate attorney in the REO property process is to work on behalf of the lender as their representative in the sale of the property. At the very least, an experienced REO attorney needs to know the ins and outs of complicated conveyancing and complex title issues, foreclosure law, and municipal regulations in the area in which the property is located.
Most lenders will maintain a Real Estate Attorney to complete their REO transactions as they are obtained, including immediate title searches and clearing any existing issues relating to the conveyance early in the process. It is not advisable to use the Foreclosure Attorney as the REO attorney however, as this can cause delays in the title search process, and result in further losses and delays for the lender.
------------------------------------------------------------------------------------------
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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