House Mortgage Underwater? – Homeowners Beware

According to the Minnesota Association of Realtors we have a new set of

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scams that are hurting our already flooded homeowners.

Recently we found out that we can refinance under a new program called the Home Affordable Refinance Program (HARP).  This is a program set up to help homeowners whose homes are mortgaged for more than they are currently worth.  Often we call this “underwater”.  Anyway, as with all new programs it has brought out a gaggle of scammers hoping to take your money.

If you suspect you have been scammed or have tried to be scammed please report this activity to the Better Business Bureau (www.bbb.org/us/scam-source).

If you are considering applying for this new mortgage remember to work directly with your lender and do not pay anyone except that mortgage company.  Do not pay upfront fees for counseling, lawyers or be conned into believing that someone can help you stop the foreclosure process.  These are typical scammer games that can cost you money and possibly the very home you are trying to save.  One last tip they gave that made lots of sense was to watch for very similar website addresses as these people can be sneaky.  Never give info over a website such as any of your private mortgage information or account information.

To find out if you might qualify for a HARP go to http://www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx or by calling at 1-888-995-HOPE.

There is hope out there for homeowners and hopefully these tips will get you to the right space and scammers will find something else to do with their time.

Who is Buying Homes?

According to the MN Association of Realtors.  Minnesota home buyers have some characteristics.  Do you fall into one of these?

  • 42% of recent home buyers are first time homebuyers
  •  The typical home buyer is 38 years old
  • 2010 median household income for buyers was $76,900
  • 61% of recent home buyers were married couples
  • 17% of recent home buyers are single females
  • 29% of MN recent home buyers said that their primary reasoning for purchasing a home was the desire to own a home.

If you are looking to be the next home owner please give me a call!  You can also visit my website and shop on your own until ready to go see one of the homes that are currently listed.

Contact Kim Woehl – Keller Williams Premier Realty Serving the entire north metro.  651-214-1459

kwoehl.kwrealty.com

Who is the First Time Home Buyer

First Time Homebuyer?

 

Renting Your Home – What every homeowner needs to know.

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The housing market continues to be sluggish and home prices remain lower than sellers would like.  For some home owners renting is the solution to making the mortgage payments.

Before you jump into being a landlord and renting out your home, you might wish to consider a few ideas.  First, do you have a temperament that will allow you to work directly with tenants?  Are you a people person?  Will it be hard for you to see others living in your house?  If it still sounds like a good idea, you will next need to decide what it would need to bring in on a monthly basis.  Make sure you include the mortgage, taxes and insurance.  Hopefully you can rent it for more than your costs so that you can make a bit of money as well.

The next thing that must be considered is the rental cost.  You will want to price yourself into the market, not out of the market as having your home sit vacant is not bringing in any money.  Do your research and make sure you are pricing your home accurately.  Remember that although you might love your extra-large deck or fenced in yard that not everyone is willing to pay for extras.  Some tenants will only be looking at the number of bedrooms or number of baths.  With this in mind, price accordingly.

Don’t forget your Schedule E – Yup all income is taxable so please contact your accountant too so that you can better understand what expenses and deductions can be included and to learn how much you will have left over at tax time each year.

Maintenance will need to be considered too.  Things like painting and cleaning between tenants.  Home repairs and maintenance like new siding and roofing.  Perhaps you need to replace a screen or hire a plumber to fix something in the home.  A pool of money should be sitting here in the event that something should break.  This is a good time to tell you that not everyone will treat your home as well as you do.  Some tenants will be destructive costing you thousands of dollars.

If you’re still thinking, “Yeah I can do this”,   then the next step is finding the right tenant.  While this sounds as simple as placing an ad and a sign at the curb, there is much more to be considered.  First off you will want to find a tenant who can actually pay the rent each month and on time.  You will want to treat each consideration with great care.  What does their credit look like, are they employed and for how long?  Do they move around a lot?  Have they ever been evicted?  It is best to interview each tenant as if you were filling a job position.  Make sure you put all information in writing and if they have rented previously ask for former landlord information so that you can contact them as well.  Always collect personal and professional references and do a credit and background check!

So you’re finding that this is still a bit of work and there are still a few more considerations.  Landlord’s insurance is going to cost you a bit more than the standard homeowner’s policy.  A general guideline is about 25 percent more.  The good news is that this cost can reimburse legal fees and provide liability protection should a tenant become injured in the home.  Maintenance and repairs must also be handled quickly so things that you could put off as a home owner must be fixed as a landlord.  You will need to handle complaints and yes, even legal issues such as in the case of eviction which can be costly.

If you like the idea of renting but not taking those direct phone calls then you may want to hire a property management company who will handle these responsibilities on your behalf.  If this is the route for you look for about an a additional 15 percent of the monthly rent to go towards this payment each month.  I hope you have found this information helpful!

If I can help you to sell your home or manage your property, give me a call!  Kim Woehl – Keller Williams Premier Realty 651-214-1459.  I work in the north metro area of Minnesota. If you enjoyed this article please like my page!  Have a great day!

Making Sense of the Foreclosure Process

The foreclosure process can be confusing and understanding what will happen can help you to better understand what is happening and when.  The pattern of the foreclosure process is as followed.  It is important to note that this is only a guide and that each lender will do things a little differently.    This is also a great time to remind everyone that I am not a lawyer and any specific questions about foreclosure should be asked of your lawyer.

During the first month you will have a missed payment.  This starts the process.  15 days after your missed payment you will be charged a late fee if you have not yet made your payment.

As you near a month past your payment due date you will begin to get collection calls.  Your loan is now in default status.  By day 45 you will see that your late fees are accruing.

At 60 days past your last payment you will get a letter from your lender.  They will give you a deadline to get all things current.  If you have a conventional mortgage the loan is sent to an attorney for the foreclosure process to begin.   By day 90 mortgage payments 1-4 are due.   Day 91 in the Foreclosure process is significant if you have an FHA Mortgage as this is the date that your loan will be sent to attorneys and the foreclosure process will begin.

When you get a mortgage you promise to pay the monthy payments.  When you don’t pay these installments in a timely fashion the lender calls the balance due.  This is called the acceleration clause.  We are now nearing 130 days since your last payment.  At this time your acceleration letter expires and the lender does what is called Foreclosure by advertisement.  This means that they run an ad in the local paper for 6 weeks.  At this point in the process you can still pay all late payments .  Attorney’s fees are added to the arrear or end of the loan.  On day 144 in the foreclosure process the occupant of the property will be served with notice of foreclosure.  Note that it says occupant?  This lets others who may be renting or living in the home time to plan to get out.

Day 174 – this is the final day to pay back arrears.  Tomorrow is the Sheriff’s sale at the courthouse in the county where property is located.

Once the sheriff sale has occurred you enter the phase of the foreclosure process called the redemption period.  This time frame is typically 6  months long.  There are some exceptions so again ask your lawyer how your situation will look.

During the redemption period the owner has a couple of options.  They can sell their home or try to refinance and remain in the property.  As of day 355 if the loan is not paid off in full or possession is not kept, the owner must surrender the property.

The entire process takes close to a year.  If you are behind on payments the best thing to do is to contact your lender right away.  Sometimes they will work with you to restructure or modify the loan.  The longer you wait the less likely they will be to work with you.

Having the expert advice from your lawyer as you move through this process will be very beneficial.

Is Bankruptcy the Answer?

I found some great general knowledge that helps explain bankruptcy better than I might do.  This is a great time to remind everyone that I am not an attorney so your best bet is to seek the advice of an attorney who specializes in your area of need.  Check out the website http://www.hoglundlaw.com then click on bankruptcy.

Bankruptcy is not something that you would want to take lightly however in some cases this is the best option.   Again, your lawyer will be able to make sure that this is the best choice for you.