Posts Tagged ‘Credit Report’
Purchasing Real Estate on a Short Sale
Jodi Funke asked:
A short sale occurs when a lender agrees to allow a homeowner to sell their home for less than the amount owed on a mortgage. Why would he do this?
How the Lender comes out a Winner
While it may seem surprising that lenders would accept less than they are owed, they do benefit from the process. The lender is going to take a loss either way. He might go through the long, costly process of foreclosure and then another long process of evicting the homeowner, fixing up the property, listing it for sale and ultimately selling it for less than he has invested. His other option is to accept a short sale now, avoid the foreclosure process and avoid being stuck with a difficult to sell property.
How the Homeowner Benefits
A foreclosure is very damaging to one’s credit report; with a short sale, the homeowner is doing their part to meet their obligation to the lender while minimizing the damage to their credit history.
Great for the Buyer
Though the process of a short sale can be frustrating, the buyer benefits by purchasing real estate at a reduced price; often for pennies on the dollar. Buyers who are looking to negotiate a short sale should work with real estate professionals who are experienced at handling these transactions.
Sometimes the buyer is one who will be fixing up the home for their primary residence. Often, the buyer is an investor who is looking to “flip” the property for a profit. Lenders who accept a short sale frown on investors who profit from the very property that they took a loss on! This is the reason for seasoning requirements; owning the property for a certain length of time before reselling.
Jodi Funke is the founder of http://www.cashforshortsales.com a company who specializes in short sale transactions. Jodi is a transactional lender who provides funding for the investor to purchase a property on a short sale and sell the property for a profit the same day. Their team of real estate professionals, attorneys and title companies are experienced at handling these transactions while working at the highest level of integrity.
La Mirada Real Estate
A short sale occurs when a lender agrees to allow a homeowner to sell their home for less than the amount owed on a mortgage. Why would he do this?
How the Lender comes out a Winner
While it may seem surprising that lenders would accept less than they are owed, they do benefit from the process. The lender is going to take a loss either way. He might go through the long, costly process of foreclosure and then another long process of evicting the homeowner, fixing up the property, listing it for sale and ultimately selling it for less than he has invested. His other option is to accept a short sale now, avoid the foreclosure process and avoid being stuck with a difficult to sell property.
How the Homeowner Benefits
A foreclosure is very damaging to one’s credit report; with a short sale, the homeowner is doing their part to meet their obligation to the lender while minimizing the damage to their credit history.
Great for the Buyer
Though the process of a short sale can be frustrating, the buyer benefits by purchasing real estate at a reduced price; often for pennies on the dollar. Buyers who are looking to negotiate a short sale should work with real estate professionals who are experienced at handling these transactions.
Sometimes the buyer is one who will be fixing up the home for their primary residence. Often, the buyer is an investor who is looking to “flip” the property for a profit. Lenders who accept a short sale frown on investors who profit from the very property that they took a loss on! This is the reason for seasoning requirements; owning the property for a certain length of time before reselling.
Jodi Funke is the founder of http://www.cashforshortsales.com a company who specializes in short sale transactions. Jodi is a transactional lender who provides funding for the investor to purchase a property on a short sale and sell the property for a profit the same day. Their team of real estate professionals, attorneys and title companies are experienced at handling these transactions while working at the highest level of integrity.
La Mirada Real Estate
Pre-qualifying: Understanding the Process and the Benefits Related to Purchasing Real Estate
Katrina asked:
Any person interested in purchasing real estate properties need to be pre-qualified for a loan. Doing this puts a buyer in good position especially in deciding what to buy and how much to buy. However, do you know what getting pre-qualified means? Do you already know the benefits of getting pre-qualified?
Pre-qualifying: the meaning
Pre-qualifying is the process whereby a lender makes an initial analysis of whether or not the borrower is qualified for a loan. In this stage of mortgage application, lenders draw a rough estimate of the amount that could be possibly granted to the borrower. These are then based on few information that will be provided by the borrower. After such, they will send a notice through a letter, in order to affirm the borrower that they are qualified to loan a specific amount.
Certain calculations may be done to draw the estimates. They do this by identifying qualifying ratios. These ratios will give the lender a rough picture of the relationship of the borrower’s income to his or her debt. This, along with the compensating factors, will also help the lender in identifying the financing options to suggest.
As mentioned above, borrowers will be asked to furnish data for their analysis. This is the basis for calculating qualifying ratios. The data is also used to identify compensating factors that could counterbalance any deficiencies of the borrower. Below are the data that might be required for pre-qualifying:
Monthly expenses including your annual tax Income from all sources Basic information like name, address, occupation Assets owned and current debts Credit report History of previous residences and employment
Getting into the process
Know that getting yourself pre-qualified will not cost you a dime. You can just go to a trusted lender and give them the data requested. Some will also consider over the phone pre-qualifications (if the lending institution permits it). Another option is to go online. Some websites provide prequalification calculators that will generate an analysis that could be similar to that of the lender. However, these services are not accurate. Hence, it is still best to consult experts in person.
Benefits of getting pre-qualified
Although this process does not guarantee you in getting the actual loan, being pre-qualified can give you an idea on what homes you can purchase. Aside from that, it can also give you a picture on what your monthly expenditure will be if you avail of the loan. This will get give you time to think of ways on how to manage your finances efficiently.
Other points to consider
If you want to prove that you are a serious buyer, getting pre-approval is sometimes better. In pre-approval, you get a more accurate estimation of the loan; thus, there will be no doubts in picking out the house that you want. In addition, doing this would also expedite your loan processing thereafter.
Pre-qualification is just the first step in getting a mortgage. Therefore, it should not be misconstrued as the actual loan itself. Remember, the values are estimates only. It can even change when the lender goes through an extensive credit check (like in pre-approvals). In case, you have provided a falsified or an altered information, the amount of loan could change; or worse your application can be denied.
La Mirada Real Estate
Any person interested in purchasing real estate properties need to be pre-qualified for a loan. Doing this puts a buyer in good position especially in deciding what to buy and how much to buy. However, do you know what getting pre-qualified means? Do you already know the benefits of getting pre-qualified?
Pre-qualifying: the meaning
Pre-qualifying is the process whereby a lender makes an initial analysis of whether or not the borrower is qualified for a loan. In this stage of mortgage application, lenders draw a rough estimate of the amount that could be possibly granted to the borrower. These are then based on few information that will be provided by the borrower. After such, they will send a notice through a letter, in order to affirm the borrower that they are qualified to loan a specific amount.
Certain calculations may be done to draw the estimates. They do this by identifying qualifying ratios. These ratios will give the lender a rough picture of the relationship of the borrower’s income to his or her debt. This, along with the compensating factors, will also help the lender in identifying the financing options to suggest.
As mentioned above, borrowers will be asked to furnish data for their analysis. This is the basis for calculating qualifying ratios. The data is also used to identify compensating factors that could counterbalance any deficiencies of the borrower. Below are the data that might be required for pre-qualifying:
Monthly expenses including your annual tax Income from all sources Basic information like name, address, occupation Assets owned and current debts Credit report History of previous residences and employment
Getting into the process
Know that getting yourself pre-qualified will not cost you a dime. You can just go to a trusted lender and give them the data requested. Some will also consider over the phone pre-qualifications (if the lending institution permits it). Another option is to go online. Some websites provide prequalification calculators that will generate an analysis that could be similar to that of the lender. However, these services are not accurate. Hence, it is still best to consult experts in person.
Benefits of getting pre-qualified
Although this process does not guarantee you in getting the actual loan, being pre-qualified can give you an idea on what homes you can purchase. Aside from that, it can also give you a picture on what your monthly expenditure will be if you avail of the loan. This will get give you time to think of ways on how to manage your finances efficiently.
Other points to consider
If you want to prove that you are a serious buyer, getting pre-approval is sometimes better. In pre-approval, you get a more accurate estimation of the loan; thus, there will be no doubts in picking out the house that you want. In addition, doing this would also expedite your loan processing thereafter.
Pre-qualification is just the first step in getting a mortgage. Therefore, it should not be misconstrued as the actual loan itself. Remember, the values are estimates only. It can even change when the lender goes through an extensive credit check (like in pre-approvals). In case, you have provided a falsified or an altered information, the amount of loan could change; or worse your application can be denied.
La Mirada Real Estate