Lots of articles, lots of talk about the bailout - are you still confused as to whether you are eligible for help?
Here is a quick summary for your reference.
FHA Plan (This applies if you have FHA financing through any number of lenders) Lenders will modify interest rates or forgive a portion of your principal, to bring the ratio of mortgage payments (including HOA dues) to 38% of your income.
To be eligible you must:
Have a loan on a primary residence that was made before Jan. 1, 2008.
Contact loan servicers and cooperate on supplying need information.
Be at least 90 days behind on payments.
Not have filed for bankruptcy protection.
Certify that a hardship, such as job loss or illness, has affected your ability to repay
Certify that you did not purposely default to get a loan modification.
CitiBank - They are projecting to rework approximately 130,000 loans. You are eligible for consideration if your mortgage related payments exceed 40% of your income. They are calling loan holders in targeted areas of the country, but Washington isn't one of them so you will need to call them to see if you can be considered.
JP Morgan Chase (owns all of the WaMu loans now)
There loan modification efforts are targeted at option ARMs that are accumulating interest, which will be replaced with fixed-rate loans that are more stable for borrowers and seen as far less likely to default. J.P. Morgan said it wouldn't begin the foreclosure process on borrowers during the next 90 days, as it opens loan-counseling centers and takes other steps to launch the program.
Wachovia Corp.
Has initiated a loan-refinancing program targeted at option Arms from the loans it acquired as part of its purchase/takeover of Golden West Financial Corp and Wells Fargo & Co.
Bank of America
They have two loan-modification pools targets 265,000 borrowers with all types of mortgages. The other was hashed out with 14 state attorneys generals and involves 400,000 subprime and option-ARM customers serviced by the big lender Countrywide Financial Corp., which Bank of America purchased July 1.
What options do you have if you are having trouble making your payments - but you don't qualify per the above?
Hope for Homeowners- This program provides, new 30-year fixed rate mortgages that are FHA insured - which means you might be able to refinance into a more affordable mortgage). To be eligible for this the home must be your primary residence (and you don't have a 2nd home/investment property), you loan was originated before 1/1/08 and you have made at least 6 payments, you are not able to pay your existing mortgage without help, your total mortgage payments are more than 31% of your monthly income, an you certify that you haven't been convicted of fraud in the past 10 years or provide false information to get the loan in the first place. Hope for Homeowner Website
Credit Counseling - There are a variety of agencies out there that can help walk you through the options specific to you.
The Department of Housing & Urband Development Approved Credit Counseling Agencies in Washington (free or low cost)
Talk to your Loan Servicer - Call the number on your statement and find out who owns your loan. Then call the lender directly. They are much more likely to talk to you right now.
Short Sale - This is where the lender agrees to take less than the balance of the loan to avoid foreclosure. In order to be successful with this, it is critical that you work with an agent who has an experienced team to deal with this. (I work with Washington Property Solutions). Generally lenders are only willing to do short sales on primary residences - not 2nd homes & investments.
Deed in lieu of Foreclosure - Talk to your lender - this is where you transfer title in return for the cancellation of your debt. Although you lose what equity you might have, it isn't as damaging on your credit as foreclosure.
Bankruptcy - When all else fails, this is something to consider.
If you think you need help Do Not Wait!
If a loan is modified prior to it becoming delinquent, it will be counted as current and so it shouldn't affect your credit rating.
by Michelle Blue
Your Guide to Woodinville Real Estate, Neighborhoods & Community
www.MichelleBlue.com
Great news if you are a Veteran!
On October 10th, 2008, the President signed Public Law 110-389, the Veterans' Benefit Improvement Act of 2008. This law allows for $0 down payment loans in qualified counties to go up to $567,500 in King, Pierce & Snohomish counties - on loans closed through December 31st, 2011.
What a fabulous time to buy - excellent loans are available, inventory is high and prices have come down - if you have been renting or thinking about moving up - now is the time to buy!
Call me if you want my help.
By Michelle Blue
Your Guide to Woodinville Real Estate, Neighborhoods, & Community!
www.MichelleBlue.com
This quote comes from Warren Buffet in a recent Op-Ed piece in the October 17th New York Times Post.
In the article Warren discusses the stock market and the history of booms and depressions and the value to be had if you invest in the recovery.
He is referring to the stock market and makes a clear statement - we should buy American and he is. I agree - we should buy American.
The same logic applies to real estate.
It is clear that short term purchase and sales can be risky - no one can truly predict the short term, so if you want to buy a home for just a year - you may want to rent instead.
However, fears regarding the long term value (5+ years) of real estate are not based upon the actual facts. The local economy has been strong and has a diverse foundation in the service industry, technology, export and so we aren't tied to a single sector in the economy that might have troubles at any point in time. We continue to have a limited amount of land to build on and we are still significantly lower priced then other major urban areas.
Buying a home to live in - continues to be an investment that:(a) provides you shelter and a lifestyle, (b) is a forced savings plan (assuming you stay current on your principle + interest payments), (c) provides you with tax advantages, and (d) will grow in value over the long run (rent payments will never grow in value for you - just your landlord).
Buying a property as an investment - continues to be: (a) one of the few investments where appreciation is tied to the total investment value, not the amount of cash that you invest, and (b) an investment that can generate passive income in addition to longterm appreciation.
Doing nothing and just sitting on cash is a terrible long-term strategy, since it is the one asset that is sure to lose value over time due to inflation.
By Michelle Blue
Your Guide to Woodinville Real Estate, Neighborhoods & Community
The Northshore School District is transitioning to having everything on-line instead of relying on "student mail" to get information home to parents.
Not only is this a great way to save the district money - it enables you to always get the information you need - when you need it. Bravo!
What information is out there?
There is a wealth of information out there for you if you take the time to explore the Northshore School District Website. Here are a few examples:
Cheers!
by Michelle Blue
Your Guide to Woodinville Real Estate, Neighborhoods & Community!
www.WoodinvilleGuide.com
We all know that it is a buyer's market and that inventory is high. The homes that are selling are the ones that are priced aggressively and are move-in ready - buyers can be selective.
But what about the homes that aren't selling? The best deals aren't the foreclosure homes, they are the homes that have been sitting on the market for awhile, especially if they are there because they aren't "move-in ready".
You know the ones - they need to be painted, they need new carpet, they need updated counter tops, etc.. The basic house house is good - but it needs a little bit of work. These homes would have sold right away 2 years ago - because people wanted homes that just needed cosmetic work - so they could turn around and sell it for more. But investors looking to flip a house - well they aren't doing that in this market because it is too risky. Average buyers, don't want to deal with a remodel - so if you aren't afraid of going through a remodel, or can have the remodel done before you move in, you can get a really good deal and remodel the home to your own taste.
PROBLEM?
You don't have an extra $35K that you can use for remodeling in addition to your down payment
ANSWER! FHA Streamlined K loan
The Streamlined K is a GREAT Tool for the purchase of homes needing minor remodeling or repairs. The Streamlined K allows the buyer to obtain one loan to repair and purchase a home! There is no minimum repair cost threshold and the maximum amount is $35,000.
So what are eligible repairs?
So what repairs can't be done under this loan?
For more information please see the "Streamlined 203(K) Limited Repair Program" on the HUD website.
by Michelle Blue
Your Guide to Woodinville Real Estate, Neighborhoods, & Community
www.WoodinvilleGuide.com
Your guide to Woodinville Community, Neighborhoods & Real Estate. Michelle is a Realtor, Accredited Buyers Representative and WA State Certified Real Estate Instructor. www.WoodinvilleGuide.com
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