If a property is being sold as a Short Sale it means that the loan on the property is for more money than the property can be sold for. There is a shortage of funds due the lender. Sometimes a lender will forgive this amount and sometimes it will not. If the amount is forgiven it may not be a win for the seller because they may have to show this amount “forgiven” as income in their taxes the following year. It must be shown as income because it was money that was owed by the seller through a note to buy the property, but not paid back to the lender and the IRS looks at this as money in your pocket even though you never see the money.
It is now critical that your lender is consulted first about potential closing dates for the contract in order to set expectations for everyone involved in the agreement — that means the buyer, the seller, the lender and both Realtors representing the buyer and the seller. The minimum amount of time we need to plan on to complete the loan process is at least 30 days from the initial application.
When a lender evaluates a loan application, a process called underwriting, they try to evaluate the ability and willingness of the potential borrower to repay the loan. The application the borrower fills out is sent to an underwriter, who is a real person and not a computer program. The underwriter then judges the borrowers ability to repay by reviewing the income and stability of past earnings.
Here we go again, with the talking heads on financial news misinterpreting the impact of the Fed’s actions on home loan rates. Here’s the scoop. What the Fed just announced is huge – they have committed to buy another $750B in Mortgage Backed Securities, and $300B in Treasuries. But what does this mean and why…Read More »
Last week Burlingame had 63 houses for sale and only saw one sale. The Median Price for Burlingame single family homes was $1,299,000. The least expensive house listed was $699,000 and the most expensive listed at $3,325,000. This median aged home is 67 years old and it has 3 bedrooms and 2 bathrooms. This house…Read More »
The thought of buying a home can be overwhelming if this is your fist time. Its a complex event during which there is much to learn and to consider. How much can I afford? Where will the down payment come from? How much will I need and where can I find the best loan? How…Read More »
Lenders today generally use two standard guidelines to determine how much of a monthly mortgage payment you can afford and what your debt ratio is. The first guideline is that your household should spend no more than 28 percent of its gross monthly income (before taxes) on monthly housing expenses, including: mortgage principal and interest,…Read More »
If you are fairly new to buying and selling real estate, meaning you entered the real estate market this decade, you are probably unfamiliar with the term Points. Points are unique to our country, no where else in the world is the buyer offered the opportunity to buy down their interest rate. But in the…Read More »
Today is Friday and the end of another work week. This weekend will find Open Houses waiting for you to visit and hopefully you will want to buy one for your family. With everything that has gone on in the lending world lately, you may be asking yourself, “Can I buy a home now? Is…Read More »
If you have a loan from one of the many companies that have declared bankruptcy this past month is theresomething you should worry about? The short answer is NO. The problems we are seeing right now are due to Wall Street buying up loans that were packaged for resale and sold off across the world. …Read More »
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