Huntington Beach Short Sales: Getting divorced, neither can afford, what to do?

Published 12-10-10 by Tony Hunthausen

Huntington Beach CA – In this case I would recommend you sell the house. Now, if you are reading this blog, then you must be researching a short sale.

Which means that you are probably upside down on the home. You have three options.

Option #1: Let your lender foreclose on the home. You just stop making the payments and surrender the home to your lender.

Option #2: Short Sale the house and get the debt wiped out. A short sale offers the following benefits over a foreclosure.

Issue: Can I get a Future Fannie Mae Loan?

Foreclosure: The current Fannie Mae Guidelines require you to wait 5-7 years before you can buy another home with a Fannie Mae Loan. Most other banks and lenders have the same or even stricter procedures.

Short Sale: If are back on your feet 2 years after the short sale, then Fannie Mae guidelines allow you to get a loan from them.

Discover how other sellers successfully did a short sale to avoid foreclosure by clicking here.

Issue: Can I get a future loan from any mortgage company?

Foreclosure: Any future application will require you to answer the question, “Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?” you’ll have to answer that question yes.

Short Sale: You can state “No” because you short sold your home. You only have to say yes if the bank completes the foreclosure.

Issue: Credit Score Impact.

Foreclosure: Your score is typically lowered by 250 to 300 points, or even more. This often stays on your credit score for over 3 years.

Short Sale: Only late payments show up. After a short sale, the mortgage is normally reported as “paid in full, settled.” This lowers your score as little as 50 points if all other payments are being made. Oftentimes, this can be off your credit report in as little as 12 months.

Issue: Will I owe the bank any money for the shortfall?

Foreclosure: Many lenders take 12-18 months to foreclose upon a property and resell it. This dramatically increases the loss and makes any deficiency judgment potentially bigger.

Short Sale: Few lenders ask for a promissory note on a short sale. As an example, on one short sale, the bank lost over $120,000. They settled with the seller for $25,000 to be repaid over 15 years with zero interest. The seller’s monthly payment was only $138,89. You can often even negotiate and have the promissory note waived.

Option #3: Rent the property. This is a good way to earn some extra money. However, if you are upside down, then it is more than likely that the rent will not cover the mortgage. That means someone will have to write a check each month covering the loss.

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at Tony@HunthausenGroup.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail. If you prefer, then you can call me at 714-334-7808.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Huntington Beach Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.

Thanks for reading this, Tony Hunthausen.

Tony is a Real Estate Broker Associate at Remax Select One.

Phone: 714-334-7808. Tony@HunthausenGroup.com.

Helping One Homeowner At A Time

View My homes for sale at www.SellingHuntingtonBeach.com.

Tony Hunthausen specializes in loan modification assistance and short sales in Huntington Beach California. Huntington Beach Loan Modification Help, Huntington Beach Short Sales. Huntington Beach Short Sale Realtor Short Sale Realtor. Huntington Beach CA Short Sales. Huntington Beach Realtor.

Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Tony Hunthausen’s personal views and do not reflect the views of Remax Select One. This information on Huntington Beach Short Sales: Getting divorced, neither can afford, what to do is provided as a courtesy to our viewers to help them make informed decisions.

Sellers Need to Think Like a Buyer

Published 06-15-10 by Tony Hunthausen

The mindset of the seller who has lived in his or her home for many years, is often clouted by the many memories and emotions involved with that experience. Though these emotions are perfectly normal, they oftentimes can hinder the homeowner when it comes time to present the home to prospectives buyers.

It is important to look at your house as if it belongs to someone else. The first step in this process is to depersonalize your living space. If you are already planning to move out, packing much of the personal effects that range upon your walls, mantles and counter spaces will help create a more show-able space to your prospective buyers.

The second step is to declutter all the rooms in your house. By decluttering, you create a much more presentable and comfortable space for buyers. Though that clutter may be comfortable and familiar to you, it can easily be a turn off for buyers.

Finally, the last step is to correct those easy problems -that as a long-time homeowner you probably barely notice. This includes repainting areas in the house, putting in circuit protectors, smoke detectors, cover plates, and caulking kitchen and restroom sinks. These are the most cost affective ways to make your home much more showable.

As always, the Hunthausen Group is here to help. It is our goal to make sure your home is in the most sell-able conditions when it comes time to move out.

A Real Estate Market Update

Published 03-05-10 by Tony Hunthausen

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A quick Real Estate Market Update by Tony Hunthausen as he discusses interest rates and the current low inventory we are experiencing. We expect a busy Spring and encourage anyone looking to buy or sell in the coming months to contact Tony.

More on Loan Modification vs Short Sale

Published 02-17-10 by Tony Hunthausen

As we talk to more and more homeowners who are in distressed situations with their home loans, an issue that often comes up is the concern and worry that many have regarding their good credit rating. They have worked hard to attain it and don’t want to lose it. As a result they have struggled to continue their mortgage payments at all costs, draining their savings, going into higher and higher credit card debt, and some even tapping retirement accounts.

In these situations it is clear that the homeowner won’t be able to continue making the payments as they are currently structured given their present financial situation. Many folks initially feel that they want to try and keep the home if possible and do a loan modification. They think this would be best for their credit and are not excited about going through a short sale and a move. This may be the house they could live in for the rest of their lives, or they may think it will make a good rental down the road when they can move up into a bigger home.

Here are some important questions to ask yourself it you are a homeowner in this situation.

1. Is this the home you want to live in for the long run?

2.How far underwater are you with regard to loan balance vs current market value?

3.If you worked out a loan modification, how long would it take you to regain lost equity plus costs of sale? Figure 3-5% per yr appreciation depending on how conservative you want to be.

4. Are you aware that most lenders aren’t highly cooperative with attempts at loan modification or short sale unless you are delinquent on your loan by 2 months or more? Please don’t consider this advice to quit paying (we are not financial advisers), but only a statement of fact from our experience.

5.What is a conservative return you might get on some of that money if you were not paying it on your mortgage for a home that may be underwater for another 5-10 yrs with no real return.

6. Add up your mortgage, taxes, insurance, HOA dues plus a maintenance and vacancy factor (maybe 15-20% for a SFH – could be less or more on any given year) to see what rent payment you would need to cover these costs should you decide to modify your loan and eventually keep it and rent it. How much would the loan need to be modified to make it work? Even with the modification, are you prepared to deal with the potential periodic cash infusion that may be needed to keep it going if maintenance and/or vacancy increased?

7. If you did a short sale and could buy again in as little as two yrs for a lower price than you are paying on now, would that make sense, especially if any ding to your credit could be repaired by then?

Their are other questions, but these are some to get started with. Most homeowners for whom this may not be their long term dream home that we have worked with, after considering the important questions and much soul searching, come to the conclusion that they need to take advantage of the short sale process and move on. One day they will look back on it and see it as a bump in the road from which they did recover.

Typically we are told that a loan modification or short sale can affect your credit mild to moderately for 1-2 yrs, depending on where it was to start with. Some have indicated that that time may be reduced with some more aggressive repair strategies. In may cases a FICO score may drop as little as 50 points (compare this to a foreclosure where it may affected by as much as 300 points and stays on your credit history for 10 yrs).

Our advice is, therefore, not to be overly concerned about your credit rating. Ask yourself the right questions and consult with a real estate expert to help in your decision. If you are not in the Southern California area and don’t know a good agent, give us a call and we will refer you to an expert in your area.