I've done a short sale. How long before I will be able to buy another home?

I've done a short sale. How long before I will be able to buy another home?

One of the biggest advantages in doing a short sale instead of foreclosure is the shorter waiting period before you are able to purchase a home in the future. For example, in certain circumstances one can be current on their payments and still do a short sale. And if a homeowner is current on their mortgage through a short sale, they can qualify for an FHA loan afterwards without any waiting period. The same option is not available following a foreclosure.
There are a number of variables that determine the length of the waiting period before you can purchase a home after a short sale, including the homeowner’s credit rating, extenuating circumstances and the guidelines of the lender you are working with.
While the timeline will vary according to each individual’s situation, here are some general guidelines on the waiting period for a loan after a short sale:
FHA loan after a short sale

• No waiting period if homeowner was current on mortgage when short sale closed
• 3 year wait if homeowner was in default at closing
• Less than 3 year wait if the homeowner has re-established good credit and can show extenuating circumstances

Fannie Mae loan after a short sale

• 2 year wait if the homeowner puts 20% down
• 4 year wait if the homeowner puts between 10% to 20% down
• 7 year wait if the homeowner puts less than 10% down
• 2 year wait if the homeowner can show extenuating circumstances and puts more than 10% down

Freddie Mac loan after a short sale

• 4 year wait before being able to get a loan
• 2 year wait if the homeowner can show extenuating circumstances

Every homeowner’s situation is different, so we always recommend that you speak with a real estate attorney who can offer advice on the legal and tax implications for your individual circumstances.

Painting Tips!

 

#1: Make a paint chip key ring

 I recently made my own paint chip key ring, and it’s so useful! I wish I would have done this long ago! It’s just a simple key ring with all of my paint colors and paint names attached. It really comes in handy when I’m out shopping for fabric, furniture, or decorative accents like pillows, etc.

 

#2. How to choose a paint finish

When you’ve never painted anything before, that first time to the hardware store is a doozy. Paint comes in a bazillion finishes and it can be really confusing when it comes to which one you’re supposed to get for which project.  So, after years of using different paint all over my house and my furniture, here’s what type of paint I usually get for different projects:

Flat paint: use for walls in living rooms, bedrooms, ceilings, or furniture

Eggshell: use for walls in hallways, dining rooms, kitchens

Satin: use for walls in bathrooms, or furniture

Semi-gloss: use for windows, trim, doors, and cabinetry

 

#3. Use Tack Cloth

Oh, tack cloth, how I love thee. Have you ever sanded down your furniture or wooden trim before painting it and then ended up with a million bits of fuzz and dust in your paint job? It can be so frustrating to paint a piece so perfectly and find out after it’s dried that there is a giant tumbleweed stuck right on top. Tack cloth is the solution for that. It’s basically like a kinda sticky rag that doesn’t get it’s stickiness anywhere. You just wipe down the surface of whatever you’re painting and it picks up everything. I use it on every single piece of furniture that I paint. I highly recommend it for your next furniture paint project.

 

#4. Furniture touch up pens

These things are definitely on my list of awesome inventions. I am well known around these parts for being heavy handed with a vacuum cleaner and scratching up the legs of all our furniture.

 

#5. Save time with artist brushes

I love this next tip. It saves me tons of time when painting!  I use this tip a lot when painting our house. I almost never remove the doorknobs (unless I’m doing this), hinges, and electrical outlets. Instead, I use a small artist’s paintbrush to edge around them. They’re so small and precise and they work perfectly for this. They work really great for touching up small knicks and marks on your walls, too.

 

#6. Prime before painting wood

I painted a lot of furniture before I learned about primer. It was the MOST annoying learning lesson I’ve endured yet, as most of those pieces ended up having to be redone. I’m sure it’s common knowledge to any of you seasoned furniture painters, but for those of you just starting out (like I was a few years ago!), hopefully this tip will save you from the trauma of peeling furniture. 

 

#7. Wax it.

When it comes to finishing furniture, wax is my favorite method.

 

#8. Cheap Sources for Paint Cans

 Did you know you can get empty paint cans of all different sizes at Home Depot for just a few bucks? 

 

#9.  Gloss spray paint

I’m obviously a huge fan of all types of spray paint. However, my personal fave is high gloss spray paint when it comes to coating small accessories or ceramics.

 

#10. My favorite gold spray paint

There are a million gold spray paints out there, but they are not made equal. Don’t get me wrong, they all work just fine. However, if you’re looking for that certain gold color that is super trendy right now, yet always classic, my go-to gold spray paint is Rustoleum Metallic Gold.

 

 

 

Important Home Improvement Projects for Summer

Decking

We recommend self-inspecting your deck each year for issues such as loose nails or screws and wood that is rotted or warping. Ignoring these issues can compromise the deck’s stability. A deck will last longer if it is power washed annually and stained as often as needed.

 

Roofing

It’s important to inspect your roof every six months to ensure it’s in good working order. It’s best to catch potential issues in good weather rather than in the middle of a thunderstorm when you encounter water leaking into your home. 

Warning signs that your roof is nearing the end of its lifespan include curling shingles, loose granules and discoloration. It’s also a good idea to have a professional come out and inspect your roof after storms with heavy winds, excessive rain or hail. 

 

Siding

Closely examine your siding to see if any of it has become loosened or has started to rot. It’s imperative that damaged siding is addressed as quickly as possible so that moisture does not have the opportunity to set in. 

All types of siding can benefit from a spring cleaning. This can be done by the professionals or by using a long-handled brush dipped in soapy water. Power washing is not recommended in most cases because it can damage the siding.

 

Temperature control 

Check for cracks and drafts in windows and doors, which not only raise the temperature of your home but also your energy bills.

Air filters 

The purpose of an air filter is to keep airborne contaminants out of your home. The cleaner your air filter is, the less your home’s HVAC system has to work to keep your home cool. How often you change your air filter depends on the following:

• Pets
• Number of people living in your home
• Type of filter being used
• Level of air pollution and construction around the home

Driveways and walkways

Small cracks can be remedied by visiting your local home improvement store and purchasing a product that allows for patching and resealing. If there are a number of cracks or ones that are significant, we feel it’s best to call a professional so that there’s little to no evidence of the patching. 

 

 

Here are some everyday do it yourself home tips that can save you money and make your life easier.

• Keep a rug from slipping by applying strips of acrylic latex caulk on the bottom
• Apply hot glue to the ends of your hangers to keep clothes from slipping off
• Rub a dryer sheet on your baseboards to prevent hair and dirt from sticking
• Clean your showerhead by soaking it in a bag of vinegar overnight
• Save money on bed skirts and use a fitted sheet to cover the box spring
• Applying a thin layer of car wax to your stovetop keeps food from sticking  making easy clean up
• Dust off your electronic screens with coffee filters as they leave no residue
• Use a fillable dish soap sponge, filled with a mixture of vinegar and dish soap to easily wipe down  your shower keeping it clean daily without the harsh chemicals
• Rub wax paper on your closet, or shower curtain rod to make hangers or curtains slide better
• Organize your cleaning supplies with an over the door shoe organizer
• Use garden planters as hanging storage baskets throughout the home; store fruit in the kitchen or hold towels in the bathroom.
• Spray nonstick cooking spray in your candle holders to easily remove wax
• Organize your Tupperware lids using a dish drying rack
• Quiet a creaking hard wood floor by sweeping baby powder into the cracks
• Aluminum foil can be used in place of a steel wool scrub pad for pans with baked on food
• Use newspapers to clean your windows without streaks
• Rub walnuts onto small shallow wood scratches to hide flaws
 

What is a Short Sale?

Overview:

A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a Short Sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds

Short Sale is an alternative to foreclosure and may be an option if:

• You are ineligible to refinance or modify your mortgage
• You are facing a long-term hardship
• You are behind on your mortgage payments
• You owe more on your home than it’s worth
• You have not been able to sell your home at a price that covers what you still owe on your mortgage
• You can no longer afford your home and are ready or need to leave

What are the benefits of a Short Sale?

• Eliminate or reduce your mortgage debt
• Avoid the negative impact of foreclosure
• Start repairing your credit sooner than if you went through a foreclosure
• May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (up to 7 years)

What is the process for a Short Sale?

If you qualify for this option, the process is similar to a normal real estate sales transaction. You will work with a real estate agent to market and sell your home. However, your mortgage company will also be working with you and your real estate agent every step of the way to:

• set the sale price (based on current market value),
• collect financial information and negotiate with other lien holders (i.e., your second mortgage company) if applicable,
• review acceptable offers,
• agree to the terms of the sale once a buyer is in place, and
• work with the buyer’s real estate agent and mortgage lender to finalize the sale.

In some cases, you may be eligible to receive relocation assistance to use toward your moving expenses and to make the transition to new housing easier.

What Are My Loan Options?

First Choice: Fixed or Adjustable-Rate Home Loans

The different types of mortgages available today can be placed in one of two categories. They either have a fixed rate of interest, or an interest rate that adjusts over time. Technically, there's a third category of "hybrid" loans. But I'll get to that later. As a home buyer, this is one of the first decisions you'll have to make about the loan you want to use.

So how do you choose between these mortgage types? First, you need to understand how they work. Next, you need to consider the pros and cons of each type. And lastly, you should choose the loan that best supports your long-term housing plans.

Let's start with the basics...

•    Fixed-rate mortgage: This type of home loan carries the same interest rate for the entire term (length) of the loan. The interest rate makes up part of your monthly payment. It's also the only component that has the potential to change over time. So if you get a mortgage with a guaranteed fixed rate, your monthly payment is guaranteed to stay the same -- for the entire life of the loan.

•    Adjustable-rate mortgage: These are also referred to as ARM loans for short. Unlike the previous option, this type of mortgage has an interest rate that changes over time. This also means that the size of your monthly payment will change over time. It might adjust up or down, depending on market conditions at the time of adjustment. But they usually adjust upward, resulting in a larger monthly payment.

•    Hybrid ARM loan: Most of the adjustable-rate mortgages offered today are considered "hybrid" loans. They get this name because they start off with a fixed rate for a certain period of time. After that period, the rate will begin to adjust. The most popular example is the 5/1 ARM loan, which carries a fixed rate of interest for the first five years. The rate will change every year after that. Some lenders offer 1-year, 3-year and 7-year ARMs, as well.

•       With an ARM, you can probably save money during the first few years by securing a lower rate (when compared to a 15- or 30-year FRM). But after the initial fixed-rate period, your loan's interest rate will begin to adjust to keep pace with market conditions. They usually adjust upward, which means you'll have a larger monthly payment.

•       With the fixed-rate option, you'll have the same interest rate for the entire life of the loan. This is true even if you keep the loan for 30 years. You'll pay a higher rate than the initial rate on an ARM loan, but you won't have any of the uncertainty that comes in the later years of an adjustable loan  you're basically paying a premium for long-term predictability.

Second Choice: Conventional or Government Loan

A conventional mortgage is one that is not insured by the government in any way. This home loan is made in the private sector with no form of government backing.

A government-backed loan is insured by some type of federal agency, such as the Department of Veteran Affairs (VA) of the Department of Housing and Urban Development (HUD). The loan may still be made in the private sector, but the lender receives insurance from the federal government.

There are several types of government mortgages:

•    FHA loan -- This mortgage is made by lenders in the private sector (known as FHA-approved lenders) and is insured through the Federal Housing Administration. If the borrower defaults on the loan, the lender gets paid by the FHA.

•    VA loan -- This program is reserved for military service members and their families. It can be used to finance 100 percent of a home purchase, which eliminates the need for a down payment. This program is managed by the Department of Veteran Affairs. If you're a military member, you should have a VA specialist somewhere within your command. They can provide you with details about the program.

•    USDA loans -- These used to be called RHA loans, for the Rural Housing Administration. The program is overseen by the United States Department of Agriculture, or USDA. This type of mortgage loan is reserved for people who live in certain parts of the country. There are income restrictions as well. They are sometimes referred to as "farmer loans," due to the geographical and demographic nature of the program. But you certainly don't have to be a farmer to qualify. The program is designed for low-income residents of rural areas.

Choosing the Right Type of Mortgage for You

We've covered a lot of different mortgage types up to this point. But how do you choose the best one for your situation? Here are some questions that will help you decide.

1. How much do you have for a down payment?

If you can afford a 20-percent down payment on a house, you're probably better off using a conventional loan. You'll avoid mortgage insurance if you go that route (it's only required on loans that make up more than 80 percent of the purchase price).

If you can't afford to put that much money down, you might want to consider the FHA program. You'll pay extra insurance on the loan, but your down payment could be as low as 3.5 percent if you meet the requirements.

2. What's your credit score?

To qualify for a conventional mortgage, you will probably need a FICO credit score of 640 or higher. But the government programs are a bit more flexible. Many home buyers with credit scores below 640 have to rely on the FHA loan. Find out where you stand. It will help you decide which type of mortgage to use. It will also help you negotiate with the lender (by better understanding your qualifications).

3. How long will you be in the house?

You'll have an easier time choosing between the fixed-rate and adjustable loan by thinking about your long-term plans. The longer you plan to stay in the home, the more you should lean toward the fixed-rate mortgage. But there are certain scenarios where it makes sense to use an ARM.

Here's an example from my own experience. When I was in the military, my wife and I bought a home in Maryland. We knew were would only be there for three to four years, at the most. We purchased the house because home prices were appreciating in the area, so it was a good investment (and better than living in an apartment).

We used an ARM loan to get a lower interest rate. We sold the home at the end of the tour, before the mortgage started to adjust. So we saved money during our stay, and we got out of the loan before the rate went up. This is an example of using the right type of mortgage for your situation.

Some people use an adjustable loan even when they plan to stay in the home for a long time. The logic is that they can enjoy having a lower rate for the first few years, and then refinance the loan before the first adjustment period. This makes sense on paper. But what if you can't refinance? A lot of things can prevent you from refinancing -- not enough equity, bad credit score, etc. So there's no guarantee you'll be able to refinance down the road.

Now is the Time to Buy, Sell and Refinance

It is very rare that it is a great time to buy, sell and refinance all at the same time. For the past few years it has been a great time to buy and for those rare folks with equity a great time to refinance but a pretty terrible time to sell. That has changed in the past few months and we are now entering a trifecta moment.

Let’s Refinance:

In the past month home prices have edged up while rates have lowered. This means that if before you could not refinance you may be able to now. Rates are in the mid 3’s on a 30 year fixed for conforming loans that is insanely low.

 

Now is the time to sell:

In terms of selling there is a lack of inventory which means that there are more buyers then homes for sale. From the sellers perspective that is ideal because it creates multiple offers and higher prices. There are also far less foreclosures on the market so you no longer have those comps hurting prices.

 

Last Call for buyers:

Rates at historic lows and the beginning of prices edging up now is the time to get in and buy before you miss today’s great prices. It is last call for buyers right now who want the killer deals. There are still some foreclosures ebbing through but on the whole they have slowed down dramatically and no one is quite sure what comes next. There are also aggressive loan programs like FHA that can get you into a home with a rate as low as 3.25% on a 30 year fixed with only 3.5% down or Homepath which can get you a home with 3% down and NO mortgage insurance.