WHICH DOCUMENTS ARE REQUIRED FOR SECURING A MORTGAGE?

Which Documents are Required for Securing a Mortgage?

Ready to scout over various home sales to find out the one that best fits your idea of “dream home”? Great! But don’t forget that the surest way to heartbreak is to find your dream home and make plans to move in, only to find a lack of sufficient documents means you can’t secure the mortgage you need to finance it.

If you haven’t got your paperwork in line by now, it is highly recommended that you take care of it before you venture outside looking for your dream home. Here is your document checklist to ensure you secure mortgage approval if you really are determined to buy your dream home:

Credit Report

You should get a copy of the credit report and carefully go through it. In case of a mistake, get it fixed before filing the papers. Try to avoid late payments as that reduces your FICO score and looks bad on your credit report for future lenders.

Credit Score

Yes, you can surely get a loan even with a low FICO score. In this case you can apply for an FHA loan which doesn’t depend on your FICO score. The FHA loan comes with the benefit of also having a lower down payment rate. The lender will do a back ground check of your employment credentials, and will also require some other paperwork to finalize the loan.

Other Miscellaneous Documents

Other documents you’ll need to obtain a mortgage include:

1. Pay slips – You have to hand over the photocopies of the last two months’ pay slips. Do not give the originals.
2. Tax Statement – You’ll also need your salary and tax statements of the last two years.
3. Tax Returns of The Last Two Years - The lender will want to see photocopies of the last two year’s tax returns. Make sure that all the schedules are included and you have signed the tax return before submitting it.
4. Bank Statements – Bank statements for the last two months, or in some cases, the last three months will be required. Submit copies of every single page from all the bank accounts you hold.
5. Accounts, Bonds And Mutual Funds - You are required to submit a detailed report of all your mutual funds, bonds and accounts. Submit photocopies of the statements.
6. Copy Of Driving License/Photo ID - Essentially this is just to verify that you are who you say you are, but the deal won’t be able to go ahead without it! You can show your ID in person if you are meeting the lender face-to-face, or else send a scanned copy of it with the rest of your documents.

Be sure to keep all these documents ready beforehand, as that will prevent you from making last minute mistakes and ensure that your mortgage application process goes much more smoothly.

Reshared by Michelle Cannon
Cannon Realty & Associates

CAN BANKRUPTCY PREVENT A FORECLOSURE?

Can Bankruptcy Prevent a Foreclosure?

The answer, surprisingly enough, is yes and no. In order to explain this further we need to talk about the different types of personal bankruptcy a homeowner can file.

The most common form of personal bankruptcy is known as Chapter 7. This is a bankruptcy motion where a homeowner tells the court they are no longer able to make any payments to their creditors and asks for all of their debts to be discharged or dismissed.

Following this motion, the court will then look at the homeowners’ non-exempt assets and determine what they can sell to raise money. A trustee is then appointed to overlook the sale of those items and collect and hold the funds. Those funds will then be distributed to all creditors in accordance with the judge’s ruling. Many creditors will receive nothing or at best a few pennies on the dollar. These creditors are now prevented from ever trying to collect again.

The other type of personal bankruptcy is the Chapter 13 filing. This differs from Chapter 7 because here a homeowner is telling the court they wish to repay all of their creditors but just do not have the money to do so at the time. In this case, the court will look at the homeowner’s income and assets, along with all of their debts, before determining how much money they should place in escrow with the court trustee each month to payoff those debts. The trustee will then distribute this money to the creditors accordingly. In this scenario, the debtor would make partial payments to all of their creditors and the creditors must stop all collection activity.

So how does all of this relate to a foreclosure?

Well the first thing a bankruptcy filing does is prompt the court to issue what is called an “Automatic Stay”. This means that the homeowner’s creditors must immediately cease all collection activity until the bankruptcy is resolved.

So when an automatic stay is issued, any lender who is about to file a foreclosure action against a home cannot do so and will be forced to delay any action for three to four months. Filing a bankruptcy action can even stop a foreclosure sale on the morning of the auction.

However, struggling homeowners shouldn’t automatically embrace bankruptcy as a solution to their problems. As with all laws, there are exceptions. A lender can ask for a “Motion to Lift the Stay”. A lender may be granted a motion to lift an automatic stay if they can prove they will suffer an irreparable harm by allowing the stay to remain in effect, or if they can show the homeowner has filed multiple bankruptcy petitions in the past with the sole purpose of obtaining an automatic stay to keep the home from being sold at auction.

If the homeowner filed a Chapter 7 bankruptcy petition then the automatic stay for the most part just buys them time. It gives them an additional three to four months to be able to make arrangements to move, possibly come up with the funds to bring the loan current, or come to a new agreement with the lender. However at some point the automatic stay will be lifted and the home will go into foreclosure.

A Chapter 13 bankruptcy petition is dealt with differently though – in this case, the court will order that whatever the current arrears on the property are should be added to the homeowner’s other debts. This money now becomes part of the Chapter 13 trustee distribution. What this means is that so long as they can go back to making their normal mortgage payment and pay the monthly amount to the trustee to divide up amongst all their creditors, they can keep the home.

This situation normally works best when someone has gone into default due to an illness or loss of work for a period of time. They have since recovered and can continue making their normal debt payments but have fallen so far behind they can’t catch up without the court’s help.

Reshared by Michelle Cannon
Cannon Realty & Associates

TIPS FOR SELLING A HOME FASTER

Tips For Selling A Home Faster, For More Money

For home sellers, there is no time quite like the present. The majority of sellers are looking to find a buyer as fast as they possibly can, getting the best possible price in the shortest time frame they can. That’s easier said than done in today’s bloated, foreclosure-hit markets of course, but by paying heed to the following advice, sellers might just be able to cash in sooner than they think.

Curb appeal is all-important

Experts remind sellers that first impressions are absolutely vital to making a sale. Numerous real estate agents agree that homes with well-kept lawns and inviting exteriors nearly always sell better than those with a cluttered landscape. Quite simply, if the buyer doesn’t even get their foot in the door (and they won’t, if the home is ugly), how are they going to make an offer?

Price matters

Here’s the conundrum – sellers want a fast sale, but at the same time they often have to compete with dozens of other homes (including cheap foreclosures) of similar or lesser prices in their area. The key here is to listen to what your realtor says when recommending a realistic listing price. Agents will determine the best price for a home using comparable sales data of similar homes sold in the last three to six months.

Setting a realistic price from the beginning will avoid wasting time having to drop the asking price bit-by-bit to lure buyers in. For homes in areas where not enough comparable data exists, an appraisal may be a good idea – the appraiser will set a realistic price that any bank will almost certainly agree to by the time a buyer is found and looks to secure financing.

Explain what “Energy Efficiency” really means

We’ve all heard about ‘green homes’,but many of us don’t really realize the financial benefits of living in one. Savings on bills can have MASSIVE appeal for prospective buyers, so sellers are advised to not just point out the energy saving features of their home – but also detail exactly how much money they can save.

Get “Ready”

Let’s face it, the majority of buyers want a home that’s ready to live in. As such, sellers need to make their homes spick and spam. Fix everything that needs fixing. Creaky doors, windows that don’t quite shut, water stains, peeling wallpaper, missing tiles, etc, etc., these all need to be fixed asap! Things like this should be done before the home is placed on the market.

Reshared by Michelle Cannon
Cannon Realty & Associates

THINGS A FIRST-TIME BUYER SHOULD KNOW BEFORE BUYING A HOME

Things a First-Time Buyer Should Know Before Buying a Home

For most first-time home buyers, buying a home means obtaining a mortgage. Applying for a mortgage can be a complicated process, so it pays to do some research before taking the plunge.

Read on to learn 10 basic things you should know before buying a home.

1. Find out how much you can afford.

Many experts recommend buying a house that costs no more than two-and-one-half times your annual income. Banks offer favorable rates if your mortgage, property taxes and insurance equal no more than 28 percent of your income. Online calculators will show how debts, income and expenses affect the amount of house you can afford.

2. Address any problems with your credit rating.

Buyers with high credit scores will get the lowest interest rates. Lenders usually consult the three major credit bureaus when evaluating your credit history. Get a free copy of all three reports at AnnualCreditReport.com, and dispute any inaccurate information.

3. Know the difference between fixed- and adjustable-rate mortgages.

Most first-time buyers opt for a fixed-rate mortgage, which has an interest rate that stays constant for the term of the loan. An adjustable-rate mortgage, or ARM, offers lower rates during the early portion of the loan. While an ARM lets you take advantage of falling rates, it also exposes you to higher payments when interest rates rise.

4. Realize that prequalification is only the first step.

Prequalification means that you are qualified for to be approved for a mortgage. Preapproval is a more rigorous process that will make sellers and real estate agents take you seriously.

5. Understand that you may qualify for a mortgage with a small down payment.

A smaller down payment and good credit rating will qualify you for a mortgage in many markets. Banks often extend mortgages to buyers who can put down only 5 or 10 percent.

6. Learn about private mortgage insurance.

You must buy this insurance when you make a down payment of less than 20 percent. Find out how much this insurance will cost and whether additional fees are required. Ask your lender what conditions must be met before you can stop making insurance payments.

7. Shore up your savings account.

Your lender will like to see four or five months’ worth of mortgage payments in your savings account. The money will come in handy if you are hit with large repair bills.

8. Consider paying points.

You may have the option to pay extra points in exchange for a lower interest rate. Experts recommend that you pay the points if you plan to own your home for at least three to five years.

9. Negotiate for a more favorable rate.

Understand that mortgage rates are negotiable. If you have assets and good credit, you are in a good position to bargain for a better rate.

10. Look carefully at closing costs.

Examine the Good Faith Estimate put together by your mortgage provider to help you predict closing expenses. Ask about fees that seem unusual.

Reshared by Michelle Cannon
Cannon Realty & Associates

THE REASONS YOUR HOUSE ISN'T SELLING AND WHAT YOU CAN DO ABOUT IT, PART 2

The Reasons Your House Isn’t Selling and What You Can Do About It, Part 2

Recently, we discussed some initial reasons your home might not be selling. Here are issues that may not be as obvious, but may still be impeding the sale of your home:

Problem: Your home is not easily accessible for showings. Are you getting a lot of showing requests that you are turning down? Many sellers make the mistake of not accommodating a buyer’s request for showings because requested showing times are an inconvenience to the seller.

What You Can Do: Try and remember that your home is a product for sale. Do whatever you can to cooperate with showing requests, even if they are last minute or on off hours. Make sure the house is always tidy while you are listed, so if you get a last minute showing you don’t have to run around spending hours cleaning. Do you have showing requests on a rainy Saturday? Take the kids to the museum. And if you get that 7pm showing request, take the family out for a bite to eat that night.

Problem: Your pet is an issue. Pet problems can go beyond the presence of an unfriendly pet barking or jumping on a potential buyer. Pet owners also need to go to extra lengths to make sure to remove pet hair, eliminate dander, and keep odor to a minimum.

What You Can Do: Yes, it’s extra effort, but you’ll reap the benefit of breaking out the lint brush, keeping the vacuum cleaner handy, and disinfecting areas where your pet has made a mess. Take your pets out of the house during showings or make sure they are crated. A potential buyer is there to view the home that is for sale, and should not have to worry what your pet is going to do.

Do your research. Selling your home is a partnership between you and your real estate agent. Be an active participant. If you can contribute knowledge and strategy to the process of selling your house, you’re less likely to be tripped up by the common stumbling blocks that can prevent a sale.

Reshared by Michelle Cannon
Cannon Realty & Associates

THE REASONS YOUR HOUSE ISN'T SELLING AND WHAT YOU CAN DO ABOUT IT

The Reasons Your House Isn’t Selling and What You Can Do about It

Selling a home can be a daunting undertaking, and while you may be helpless to control the state of the market or the number of prospective buyers in your price range, here are a few ways to be proactive against some of sellers’ most common pitfalls:

Problem: Competition. Are there too many homes for sale in your price range? If there are too many options open to buyers in your market, you may not see as many showings as you’d like.

What You Can Do: Unfortunately, the state of the market in your neighborhood or town is pretty much beyond your control. You’ll need to think about how you can make your home a more attractive sale, either by lowering your price or providing attractive terms of sale.

Problem: Your asking price is too high. It’s stating the obvious, but if your asking price is too high, you’ll price yourself right out of a lot of potential showings. Further, even if you do manage to land a buyer at your price, his or her financing is more likely to fall through during the sale if the house will not appraise.

What You Can Do: Working with a trusted real estate agent to come up with a fair asking price is vitally important. Make sure you are educated about the market you’re selling in, and price your home accordingly. Ask yourself whether you’d rather net a little less than you had hoped – or not be able to sell at all.

Problem: Your home lacks curb appeal. The condition of your home inside and out is critically important to making a sale. If your home doesn’t show well, a potential buyer is going to head elsewhere. Most buyers are looking for a house they can move into without a ton of small repairs and cleanup.

What You Can Do: You’ve been meaning to fix that leaky faucet or repaint the fence in the front yard, so now is the time to do it! Of course, this should have been done when you decided to sell, but it’s never too late…De-clutter your rooms and store all personal effects. Consider investing in some new curtains, bath towels and throw rugs. To make sure that you nail that crucial curb appeal, spruce up your yard with new plantings, trim hedges and weed flowerbeds, and keep the lawn short and neat. Those minor repairs that you have been living with will add up in the eyes of a prospective buyer.

Problem: Location. Everyone’s heard that old maxim that real estate is all about “location, location, location!” But what do you do if you’re trying to sell a home on a busy street, or too close to a major highway?

What You Can Do: There are actually a few things you can do to increase your chances of a sale. If your home is on a busier street, highlight any benefits on the flip side—maybe your backyard is fenced in, your taxes are low or you can walk to a school nearby. Make sure you pay extra attention to those highlights. If you are in an area where your home is very close to a major highway, consider some type of privacy hedge or fencing. If you have older windows consider replacing them – the benefit will be two fold, you will have new windows as a selling feature and those new windows will provide a little more sound buffering inside the home. Last, consider selling at a time when the foliage is in full bloom to help naturally block sound or visual effects from nearby highways.

Reshared by Michelle Cannon
Cannon Realty & Associates

HOW TO PREPARE FOR AN ANNUAL HOME INSPECTION

How to Prepare for an Annual Home Inspection

Home inspections are a pain, but unfortunately, they are something many homeowners and renters have to deal with. Homeowners looking to prepare their house to sell will have to get past an inspector at some point. Renters are often subjected to the dreaded annual inspection commissioned by the landlord to make sure the property is being kept up.

Though a home inspection can be stressful, it doesn’t have to be the end of the world. If you follow some simple guidelines, you can get through it with flying colors and move on with your life.

First, make sure that you’ve tested all your light fixtures and they are all working. This is one of those basic things the inspector will look at. If some of your lights are not in working order, he will assume there are bigger problems with the home. Next, replace your furnace filter and make sure all of your HVAC equipment including the furnace, water heater, AC and appliances are in operating correctly.

Windows, screens, and doorknobs also need to be looked at thoroughly. Windows and screens should open and close smoothly, and doorknobs should be tight. Along the same lines, check the handrails and make sure they’re tight as well. It may be worthwhile to hire a handyman to come out and fix any of these and other little blemishes that could be discovered by an inspector.

Finally remember first impressions are very important so be sure to clean your place. Just like you wouldn’t dress in rags for a job interview if you hope to land the job, you don’t want to present a dirty and messy home to an inspector. On the other hand, if you clean your home thoroughly inside and out, the inspector is far more likely to look at the rest of the inspection in a favorable light.

Follow these tips and you’ll be on your way to passing your inspection with flying colors!

Reshared by Michelle Cannon
Cannon Realty & Associates