Category: Foreclosure

Getting A Mortgage After Bankruptcy

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Many consider bankruptcy as a nightmare, but it doesn’t have to be with a formidable plan. Nevertheless, it is a horrendous undertaking that one has to take when debt is becoming intense or overwhelming. Taking such drastic action will halt activities such as lawsuits and repossession.

If you’re comfortable with having this mark on your credit score for seven to ten years, not being able to seek or obtain a loan, then go ahead. If you’ve filed for bankruptcy in the past and you’re considering getting a mortgage, this article will no doubt educate you on what you need to know.

Impact Of Bankruptcy On The Ability To Get A Mortgage

Although the impact of bankruptcy can lessen with time, it limits your ability to obtain loans. It is possible to get a mortgage after bankruptcy, but it is a challenging process. Before a lender can give you the attention you deserve, the default has to be discharged.

Most lenders will take a look at your credit score to determine your creditworthiness. So, you must check your credit score report before you apply for a mortgage. In your credit score report, ensure there are no mistakes by correcting incorrect or outdated information.

If there is an error in your credit score report, do contact your credit agency to correct or update your information. When applying, your lender is most likely to ask you a few questions regarding your bankruptcy. Take note that the questions are merely to understand your financial capacity to stick to the agreement.

Mortgage Loans To Consider After Bankruptcy

After filing for bankruptcy, you need to apply for a mortgage with less restriction. There are many mortgages to consider, and they have their unique requirement for bankruptcy filers.

Here are a few mortgages that are less stringent and more comfortable to acquire.

  1. FHA Loans

The federal government manages this type of loan and allows you to buy a house with a down payment as little as 3.5% of the purchase price. The only downside with this mortgage is that you will have to pay for mortgage insurance, thereby leading to a high monthly payment.

  • USDA Loans

If you’ve found a home in a rural area, you should consider applying for this mortgage. The U.S Department of Agriculture is designed to meet a specific income requirement. If you’re viewing this alternative, you might not even need a down payment and it comes with a low-interest rate.

  • VA Loans

If you’re a veteran or perhaps, currently working with the military, you might be qualified for a Department of Veterans Affairs (VA) loan. This type of mortgage doesn’t require any down payment and the interest rate is ridiculously low. However, you will need to pay a funding fee, which is the percentage of your home price.

Conclusion

Applying for a mortgage after bankruptcy can seem pretty challenging. However, applying for the right mortgage will make a difference, as the requirement becomes lesser than a conventional mortgage. If you’re yet to start applying for a mortgage, perhaps you should consider the options in this article

Steps of a Real Estate Closing

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If this is your first real estate deal, the process and protocols involved when closing a deal could be draining. Closing a real estate deal entails signing some paper works that make the house yours. But before you grab that pen to draw your signature, here are steps you must take before that event. It would ensure you don’t make any mistake that you will regret later.

  1. Open An Escrow Account

An escrow account is inarguably the first step to take in every real estate deal. It ensures that none of the parties get cheated as a third party is responsible for holding the money and documents. When all formalities and processes are over, the capital and materials get moved from the escrow account to respective owners.

  • Home Inspection

Before you close a deal on the house, you need to be sure the house is safe and in good condition. Through home inspection, you’re able to discover the problems facing the house. Such information would help negotiate better with the seller. When you forgo a home inspection, you might find out that there are lots of issues with the house that requires a vast amount of money to solve.

  • Hire An Attorney

Even educated individuals often find it hard to understand the jargon in real estate documents. That is why professional legal aid is very paramount before closing. Although it would cost you some penny, it saves you the headache of making a mistake. In most states, an attorney is a requirement to handle any housing closing.

  • Title Search And Insurance

After closing a close, some drama could spring up that might threaten your ownership of the house. It could be a spurned relative left behind in a will, or maybe a tax-collecting agency that not paid its dues. Through a title search, you’re able to know if there are any claims to the house. Information like this would guide you into making the right choice.

  • Pest Inspection

If the home is a wood house, then this is a step you shouldn’t overlook. Pests can ravage a home and reduce it to nothingness, which is often frustrating to homeowners. A home inspection is different from a pest inspection. A pest inspection specialist evaluates the house, to know if there is any pest that could become a pain to the homeowners.

The seller might try to convince you that the home is perfect. Never take their word for it, as they are merely looking out for their selfish interest. The fact is, even a small infestation can wreak havoc in the future, which is why you mustn’t joke with this.

Conclusion

There are lots of things involved during a house closing. The right information would ensure you take the right step. Make sure you have an attorney that help interpret the terms, while a home inspector and pest specialist ensure if the home is safe and worth buying.

Real Estate Myths Debunked

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Myths exist in all facets of life, often propelled by ignorance. In the real estate world, there is a truckload of them. Harboring these myths would negatively impact on your real estate deals, as you will always make the wrong move.

A myth is merely an invented idea, story, or concept. You read it on the internet doesn’t make them right, which is why you need to be conscious of the information you devour. In this article, you will learn some of these myths and why they are not valid.

  1. All Real Estate Agents Are The Same

It is a common myth some buyers believe in, which can lead them to make the wrong choice. All real estate agents are different, with their diverse skill set, experience, and traits. A real estate agent with a two years’ experience isn’t the same as an agent with over 20 years’ experience. There are also real estate agents who specialize in dealing with sellers, while some deal with buyers. Have you now know why this myth is ridiculous?

  • Real Estate Agents Make A Truckload Of Money

This myth has made many people delve into real estate, hoping to make insane money after their first deal. The fact is that it isn’t realistic. Although getting a real estate license is pretty easy, real estate agents don’t make a truckload of money. The top real estate agents do earn a decent income, but a lot of factors come into play. First of all, the commission a real estate agent makes from a house sale is not always 6%, as people commonly believe. The commission is negotiable, and the agents often incur lots of expenses in the process.

  • Open Houses Sell A House

Although it is interesting, believing that your house is open for sale every Sunday. To many, an open house is a great way to sell a home and make money. According to the National Association of Realtors, only 2% of households get sold as a result of open houses. So, there is a high chance that your home will not make it to such a competitive percentage. When a real estate persuades you to utilize open houses, it is often for their interest, since they usually tend to meet new clients through such avenue.

  • Real Estate Agents Can Do Anything To Make A Sale

Many are often of this notion, believing that it is the norm since the agent doesn’t go home paid without selling the house. That is not true, as there is a strict code of ethics that they must follow. However, some professionals would do anything, but it doesn’t apply to every real estate agent.

  • Preparing A House For Sale Isn’t Necessary

This myth is prevalent and often end up affecting the seller negatively. Developing a house would ensure it increases in value. When a seller fails to this do, they end up selling the home for a peanut.

Conclusion

There are tons of myths circulating the real estate world, and it is imperative you know and avoid them. Most often, these myths often come from supposed educated individuals. When you come across them, never hesitate to debunk them.

Ways to Fight Foreclosure

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A Foreclosure is a situation whereby your mortgage holder, lender, or the bank take over your property because of late in payment. But what do you do when you are behind in paying your mortgage? What do you do when the banks are threatening to foreclose your house?

People will answer these questions based on their experiences, which may differ from person to person. As each person must have had different experiences with different mortgage holders. However, this article is a compilation of a few possible alternatives to foreclosure.

  1. Ask for a Forbearance

This is an agreement you go into with your lender/financial institution to delay foreclosure. With forbearance, your payment is suspended for a few months to allow you to catch up with your previously due payments. With forbearance, you would eventually settle every payment owed, but in the interim, it helps you catch a break and reduces the piling up of debts and, of course, stops foreclosure.

  • Mortgage Modification 

With mortgage modification, you and your lender may need to come up with a modification plan, which in essence, means that you would not need to make any payment, or your required payment is reduced drastically until your financial crisis is over. This is another sure alternative to foreclosure.

  • Set up a repayment plan 

If you are behind your mortgage payment because of a short-term financial issue, for instance, the current lockdown, setting up a repayment plan might be your only option. You and your lender can come up with a new payment plan and structure which will not in any way affect or strain your pockets while the financial issue lasted.

  • Offer a “deed-in-lieu” of foreclosure

This will not keep your home, especially if you owe more than your home is worth; however, it is a viable option in case you have suffered a permanent loss of income. It also does less damage to your credit compared to what a foreclosure would do. This alternative is advisable not because it’ll keep your home, but because it’ll keep your credit at a reasonable level and your property won’t have to go into foreclosure.

  • Short-sale

This is also known as the pre-foreclosure sale. For this to happen, the bank has to agree to allow you to put your house on the market for its current value provided that’s less than you owe. This alternative is only viable for people who bought the property when the market was hot, which has now gone soft.

Conclusion

Whatever you do, complete honesty with your lender and the bank will go a long way in opening up opportunities for any of the above alternatives, because, the goal of these alternatives is to avoid your property from going into foreclosure; therefore, it is very important that you negotiate with your mortgage holder and leave no stones unturned, particularly if you are going the way of short-sale or deed in lieu of foreclosure. Ensure that any agreement you make with the mortgage holder absolves you of being responsible for the remainder of the debt because, if this happens, you would be stuck with that debt.

You can contact Chang Legal LLC Attorneys at Law for a more professional help on how to fight foreclosure or avoid altogether.