Financing Real Estate

Increasingly this question of how long one has to wait, after a short sale or bankruptcy, foreclosure or deed in lieu of foreclosure, before getting a new home loan, keeps coming us. 

We've had many people already purchase after these events. Time has passed and people are moving on, regaining their ability to obtain a loan. Below are some general guidelines at the time of posting. 

Keep in mind that these are general. Guidelines change and more importantly details matter so speak with a lender and have them check based on your particular situation. 

It is also important to mind that after these events you made an effort and have built up a strong financial footing. The lenders will need reassurance that you are a strong borrower.

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In the last few years self employed persons were kind of left out from the loan options market.  But, that slowly changed the market calmed down.  Self employed persons can get home loans.With a 20% down payment, a self employed borrower can qualify for a mortgage using just their 2010 federal tax return with some lenders.FHA, VA, and Conventional loans with less than 20% down will always require 2 years of federal tax returns. Page 1 of the 1040 federal tax return is the starting point for evaluating self employed income, but there are certain line items that can increase or decrease a borrowers qualifying income.  Depreciation (both business and real estate) and Loss Carryovers can both be added back into the borrowers income. Un-reimbursed…

There is no denying that foreclosures have proven to be devastating to the real estate market and individuals over the this Great Recession and the cleansing process is not over yet, though most of the dirty stuff is gone. On the other side of distress is opportunity - for those who are able to take advantage of it and there are plenty so no worries there.In the Phoenix market there has been a steady flow of foreclosures of about 4,000 units per month and buyers of all sorts have been absorbing this inventory a an equally voracious pace.  While the bank owned homes make up a small percentage of active homes, they make up the largest share of sold homes: nearly 40% more or less depending on the month.Investors have played a huge part in processing…

Listening to the radio about what is happening in Japan is not a nice experience, especially if there will be any issues with nuclear leakage as that is probably a graver menace then the single, but monstrous, punches of the tsunami and earthquake.Japan will rebuild and it will need the money. Lots of that money is held in the form of debt in the United States. If and when Japan calls some of the debt to increase its own reserves to rebuilt the interest rates in the United States could jump  up. Even a small increase can have a significant affect on your house payment, but this would be small compared to what would happen if Fannie Mae, Freddie Mac disappeared and FHA was scaled back.Knowledge at Wharton has published an article: "What the Demise of…

How to avoid setting up your own hurdles to getting a home loan.Joanna and Maggie put together a short video about some things to be aware of during the home purchase process as it relates to getting a loan.  We asked Maggie to give us some pointers because she has done very well for our clients: great service: she just gets it done and that’s what I like.Though, no matter how good a loan office is the buyer has to participate, listen and follow the lead of the Realtor and Mortgage Planner. Here are several keys of advice to follow.They are very important in the real world, so please be very aware of them.1.  When buying a home start by getting pre-approved vs. simply pre-qualified.  Do this even before you start looking for a home. …

Pre Qualification is a nice conversation while Pre Approval is almost like hard currency.How do I know what price range to look in, and how do I make sure my offer is stronger?These are two of the most commonly asked questions from first-time and experienced home buyers alike. One of the best places to start is by getting pre-approved by a lender upfront in the process. Not only does it give you peace of mind knowing your price range is already pre-approved by the lender, but strengthens your position at the negotiating table, especially in a multiple offer situation.Some lenders offer pre-qualifications and pre-approvals. Here`s the difference:Pre-Qualification

• Provides a ballpark estimate of your buying power.
• Is based on summary

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Making unexpected or odd deposits in you account can derail your home purchase.A buyer with an excellent credit score received a letter of denial from an underwriter, because he didn’t know about it.Well, how would you know?It is about the mattress money.  The gift.  The money that we have been saving, just not necessarily in the bank account.When it comes to home financing, the guidelines are really strict now.When you apply for a loan, and you already have the dream home under contract there must be a certain amount in your bank account- (the amount depends on your future mortgage payment) -and this will be one of the lender’s conditions to underwrite the loan.In most cases it is not the additional money that creates the issue,…

FHA loans and Cash are dominant in the market.The government is backing the current real estate market.  Most loans are subsidized by the whole for the few.  We're it not for this, rates would be much higher as they would be subject to the norms of the free market.  Just look at unconventional jumbo loans for a truer view of the financing market.The most common is the FHA loan being utilized by first time home buyers and some investors.  It's a loan which allows for heavy contributions from the seller and only 3.5% down-payment.  34% of all transactions were FHA loans.Cash was the next biggest source of funds to buy real estate making up 32% of all transactions irregardless of price and 41% of all transactions under $150,000 the hottest segment…

Invest in real estate, just don't look at the home you'll live in as an investment, because it's not.

I wrote several times that a home is first and foremost shelter not an investment.  It's been purported to be otherwise for many decades and that's part of the problem.

It is not to say that a home cannot make a good investment, but you can do better with a different approach.

Let me start of by pointing out that why you buy a home you should look at the exit strategy and look at the details that will make the home a good purchase.  That means picking good homes in good areas where people like to live and will probably want to live in the future.  These details are important just not if it goes against the lifestyle you really want.

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Real estate lending options.The answer is yes, if the house was a short sale and the borrower was not in pre-foreclosure (that means no 30, 60, 90, 120, or 150 day late payments in last 12 months), we can originate loans with a minimum 3.5% down payment!The lender/servicer that completed the short sale must NOT have entered into any agreements that obligate the borrower to repay any amounts resulting from the short sale, including a deficiency judgment.Conventional Loans1. Ch 7 BK- 4 years from either the discharge or dismissal date.2. Ch 13 BK- 2 years from discharge date or 4 years from dismissal dateIf multiple BK’s within 7 year period, it is 5 years from the most recent dismissal dateForeclosure is 5 years from completion…