Tag Archives: how to

Springtime Gardening Tips

gardeningAs we enter the fourth month of the year, what better way could there be to celebrate this fertile and exciting time of year than to work on improving your garden? Gardening is a relaxing and fulfilling activity that the whole family can enjoy together. Plus, a rich and colorful garden can greatly add to the aesthetic beauty of your home. I’ve compiled some tips that you should keep in mind when attending to your yard this spring. Continue reading

NEW Government Ruling Devastating

Fannie, Freddie: the two government entities leader or housing regulator Edward DeMarco said this last Tuesday there will be no benefit to principle reductions of troubled borrowers who are upside down and has ordered all firms or institutions to not allow any help that is provided in the guidelines of the HAMP (Home Affordable Modification Program) and HARP (Home Affordable Refinance Program). He stated: “we concluded that the potential benefit was too small and uncertain, relative to the known and unknown costs and risks”. THIS IS DEVASTATING!!!

Treasury Secretary, Timothy Geithner noted that in the agency’s own analysis, that Fannie  and Freddie could save $3.7 billion by participating in the administration’s housing programs (HAMP & HARP), the taxpayers would save $1 billion. My commentary is that the institutions once again are controlling this country and not the government. The Obama administration, lawmakers on Capitol Hill, and housing advocates argue that principle reduction is an essential tool to help the 5 year crisis that is still going strong due to millions or about a quarter of the nation’s homeowners are under water, representing excessive mortgage debt of about $700billion!! This decision could burst the bubble that was going down in size due to the workout programs in place that have temporarily bandaged the real estate market, but now with no real help in the near future, the average homeowner who is on the fence will bail or walk away from their home. Coupled with the fact that many state laws have provisions protecting homeowners through the end of this year, I expect an onslaught of upside down homeowners to short sale their homes to take advantage of salvaging incentives currently being offered by most banks.

DeMarco, in his statement noted that only a small percentage of homeowners would strategically default on their mortgage, while most advocates would encourage it, so the savings would literally disappear for the agencies and the taxpayer. I say this is Chicken Little-type thinking and he is playing this game to not allow further losses to the institutions, who I believe are running the show!! Further, he also stated that the institutions investors would be spooked over this reduction program causing an increase in mortgage costs in the future. Another statement that shows the banks rule!!

In conclusion, the gains that have been made in the current real estate market are clearly at risk now, and will no doubt cause an increase of activity in sales and foreclosures in the near future, resulting in values stagnating, to possible reductions more likely. You can view more on this recent development here: http://www.fhfa.gov/webfiles/24113/pfstatement73112.pdf

Your comments are appreciated. What are your thoughts on this recent real estate news?

Guest Post: Managing your finances before homeownership to save your home from a foreclosure

Managing your finances before homeownership to save your home from a foreclosure

Are you planning to purchase a new home? If yes, you have to buck up your finances so that you don’t fall in trouble in the near future and then risk losing your home to a forced foreclosure. Managing your finances is the most important job that you have to do when you plan to take out a home mortgage loan from a bank. The mortgage loan entails your home as collateral so that when the borrower defaults to make the payments on time, the lender can foreclose the house and recuperate the money. How much house can I afford is the most important question a borrower should ask himself before taking the plunge. Here are some important steps that you should take in order to manage your finances once you plan to take out a home loan.

  • Stop all the unnecessary expenses: Whenever you contemplate buying a new house and forget paying further rent, you should stop making all the unnecessary expenses that you can do without. If you don’t read magazines, stop the monthly subscriptions to magazines. If you can cook well, stop dining out every weekend as this will save your dollars in the long run. You can even do without the cable connection at home. If you can build an emergency fund, you can easily take out a mortgage loan at an affordable rate.
  • Stop using your credit cards: Are you aware of the fact that the mortgage lender will check your DTI ratio or the debt-to-income ratio that is the ratio between the total monthly debt obligations with your monthly income. If you keep on purchasing things with your credit cards, you’ll drown in unsecured debt and thereby be forced to take out a home mortgage loan at an unaffordable interest rate. Therefore, stuff your wallet with cash so that you may stop buying things when you’re exhausted.
  • Save enough money: Yes, this is the ultimate secret that will take you to the path of a smooth mortgage loan approval. The mortgage loan underwriter will check the amount you’re paying down while taking out the loan amount. The more you pay down, the lower will be the rate offered to you. You should save enough money so that you can at least pay down 20% of the loan amount and avoid paying PMIs later on.
  • Keep track on your credit score: Don’t take any wrong step that can hit your credit score. Pull out a copy of your credit score time to time so that you know where you stand financially. Repair your credit as much as possible so as to grab the best mortgage loan at the most covetable cost.

When you’re dreaming of homeownership, make sure you follow the money tips mentioned above. By taking all the tips mentioned above, you can get the most appropriate loan in accordance with your affordability. Don’t forget to ask yourself “how much house can I afford” before taking out the loan.

Personal Short Sale Experience

I just closed one of the longest short sales in history with Bank of America. This sale totaled 39 months, over 3 years. Short SaleThere were a few unfortunate problems with this short sale.

Throughout the time of having this listing, there were six individual buyers that were all approved.  Unfortunately, all six also cancelled, with one rewriting an offer through another agent after the initial cancel.  This offer was not submitted when I questioned this buyer’s agent, and as a result, the offer obviously did not go through.

After the seller’s family moved out, they left the house in shambles, but I invested my personal money (which thankfully was reimbursed later through the rent payments) to paint the interior, re-sod the front yard, and thoroughly clean.

There were several liens on the house: water, sewer, trash, and HOA liens.  Most were eventually paid off by the bank and buyer.  The tremendous HOA fines totaling over $5K I managed to negotiate them off completely with no fees to be paid.

The bank changed the locks and I had to pay $250 to re-key the house.

The property sold for $30K less, with a $12K credit for closing costs–very rare on a 50% cash
down purchase, than the REO  (bank-owned) property with no closing costs credit, a block away the
month before.

All these experiences may be things that you, as a short sale buyer, are familiar with.  And while short sale transactions can be the trickiest side of the real estate market, I have had plenty of experience in managing such transactions.  Please, let me be the one to deal with the messy side of short sales–not you!  Give me a call today if you have any questions.

John A Silva
www.johnasilva.com
619-890-3648