Purchase after Foreclosure

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Congratulations are in order for a client of ours that just closed on a purchase. She came to us about 6 months ago after having a foreclosure and bankruptcy three years ago. We worked with her and connected her with the right lender, which was able to help her get a new mortgage.

Most buyers feel that once foreclosure has happened the possibility of home ownership has slipped.

UNDERSTAND THAT THIS IS NOT ALWAYS THE CASE!

Many are taking advantage of FHA and the ability to purchase a home in spite of the past credit problems. You should know that what stops many would be home buyers is not FHA but the lender that’s issuing the loan.

Different lenders adjust the requirements to their comfort level. This is not a level playing field and just because one lender said NO, it doesn’t automatically mean that they will all say NO.

There’s are still lenders out there open to taking less than perfect files and you can still get a great interest rate. Don’t expect rock bottom rates, you do have a short sale or foreclosure on your records but you will get something reasonable for your situation.

You’ll have to decide what’s more important, home ownership or a half point on your loan.

Contact me if you have questions on qualifying for a new loan after a short sale or foreclosure.

Thanks for visiting,

Ricardo

Should I do a short sale in 2012

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For those who are considering a short sale as a way to get out of the unsurmountable debt of their home, 2012 might be the last year you can write off the forgiven debt.

Yes….you read that correctly. If you have to do a short sale and you complete it before the end of the 2012 calendar year you can still qualify for the “Mortgage Forgiveness Debt Relief Act of 2007”.

This act allows those who find that a short sale is the only option to avoid foreclosure to write off the debt that was forgiven by the lender. Meaning that you wont be liable for taxes on the fogiven debt. Which you otherwise would be liable to pay taxes on.

Here’s a short example. If you bought a property for $500,000 and after the drop in value of the home you short sell it for $250,000. The lender would have to forgive $250,000 for you to successfully close the short sale. Those $250,000 that disappeared are most likely going to re-appear via a 1099 from your lender.

Which means you will be liable for taxes on those $250,000. Heavy tag, isnt it? We’ll in order to avoid this you need to make sure you do a short sale on your qualifying principle residence before the end of 2012.

With short sales taking at an average 3 to 4 months to complete, the time to act might be upon you.

Feel free to contact me via email or phone to discuss this option. You can also read more on the subject following this link.

Looking forward to meeting you,

Ricardo