My wife and I recently moved into a new home which we are still paying interest only on the loan. We also just sold our other home and would like to put the money we made off of it down on the loan. Can we put the money down when we convert or do we have to refinance?

If you’re a preforeclosure investor, with the tightening credit markets, you have no doubt noticed how much more difficult it is these days to close short sale deals.

In the past, plenty of hard money options, along with double closings and simultaneous closings made closing short sales a breeze.  However, with the credit crunch, mortgage fraud, and tighter restrictions with lenders and title companies, closing short sales isn’t as easy as it used to be.

However, there is still one very simple and easy way to close your short sale transactions without using double closings, hard money, simultaneous closings, or even the over complex land trusts.

That method is using back-to-back closings to get all of your short sale deals closed and funded on time.  Back to back closings take a short sale deal and turn it into two separate and distinct transactions.  The first transaction is the homeowner facing foreclosure selling to the preforeclosure investor.  The second transaction is the real estate investor then selling the property to the end retail buyer.

However, even if you are using a back to back closing, and your end retails buyer has secured their funds, what makes this work is that you need to secure your own funding, as the real estate investor.

So where do you get this funding of your deals?  This is often called transactional funding, and today, there are many lenders making these types of loans.  Lenders love transactional funding, because they are only lending for a period of a few hours.

With the end buyer’s loan already approved and in place, two separate and distinct transactions take place on the closing day.  The first is the investor purchasing the short sale deal from the distressed homeowner.  This is funded by the transactional funding company.  Immediately after this transaction has closed, the investor is then turning around and immediately selling the property to the end buyer.

The end buyer is using funds obtained by him through a traditional loan, or cash.  Most conventional lenders today won’t have any issue funding these loans.  The only such exception are FHA loans, which at the time of writing this article, have a 90 day seasoning requirement.  However, as the real estate market changes, and the housing market remains volatile, it is very possible that the FHA might change its guidelines.

Transactional funding is the perfect way for preforeclosure investors to fund their short sale deals in today’s foreclosure ridden market.  There are plenty of choices for funding companies, all willing to fund these simple, easy short sale transactions.

My credit score is between 650 and 670. I am planning to buy a house with my husband and his credit score is above 800.
Are foreclosure homes better deal?

So the way I understand it is that your FICO score determines the interest rate you will get (along with national interest rate levels).

With that said, when Yahoo says that todays rate is 6.364% what FICO score does this assume. If I have a FICO score of above 720 (assume 720 as worst case) then what can I estimate my interest rate to be given the 6.364%? Lower? Higher? Same?

When you fall behind in your mortgage payments, you run the risk of having your lender foreclose on you. That means you lose your home, property, everything, and end up with a very damaged credit rating that could mean you will have troubles buying a house, renting a car or even getting cable television for at least the next 10 years! This is where a short sale comes in very handy.

Short sales are ideal for when you want out of your house and need to sell fast, before foreclosure. You’ll need to talk to your lender and get them to accept a short sale, which basically means they agree to accept less than the owed amount of money. In order to convince a lender that this is a good idea, you will need to cut back on your own spending and try to find a real estate agent who can give you a fairly low commission, making the lender more willing to work with you on this.

Make sure you talk to the supervisor in the lending company. Stay away from any underlings, as this can not only slow the process, but end up giving you mixed information. Go directly to the person who is in charge and who can make the decisions on whether or not to let you do a short sale on your home. This may take some work on your part, but it’s worth it, since you may get the runaround otherwise.

Once you have contacted the person in charge of short sales, you will need to submit a letter of authorization. This gives the lender permission to release your personal information. The letter of authorization should include the date, your name and address of the property to be sold, as well as the loan reference number and real estate agent contact information.

The next step is to submit a preliminary net sheet that outlines how much you expect to sell the house for, as well as all outstanding loans, fees that will be incurred via the real estate agency and any late fees. If you are confused by this, talk to your lawyer or real estate agent about the costs that will be incurred.

You will also need to submit a hardship letter, letting the lender know exactly why you are in this financial situation. Preferably, you’ve had an illness or medical issue or lost your job, since they probably won’t be too sympathetic if you lost your money gambling.

Other paperwork to hand over to your lender include proof of income and assets as well as proof of income statements. You need to prove that you are honest and aren’t hiding large sums of money from the lender. After that, it is a matter of finding a buyer for your short sale and completing the sale successfully, provided you receive permission from the lender to do a short sale.

Short sales can be the ideal way to get rid of the problem of foreclosure. Provided you have a good excuse for not being able to pay your mortgage, you should be able to get permission to pay less than the original loan amount and save both face and your credit rating.

What is it that credit repair agecies do to get things removed that i cant do myself. I have appt. with a repair agent but am on the ropes on wether i want to use the service or not. I mean he says it will take 45days to get things removed which sounds like he is just writing dispute letters.

How much more affordable did a loan modification make your mortgage payments and what terms were changed on your loan?

If you’ve been investing in real estate, and more specifically preforeclosures, then there’s no doubt that you’ve come across a short sale deal.  A short sale is when the lender agrees to accept less than what is owed against the property in exchange for full acceptance of payment of the loan. In other words, if the loan balance is $400,000 but the bank accepts $300,000 as full payoff, then a short sale has occurred.

Many investors find short sales different to negotiate and complete.  The reason is that lenders are constantly changing their rules and practices, and short sales by nature are complex and time consuming.  This is a reason that many smart preforeclosure investors today choose to outsource their short sales.

Outsourcing your short sales is simple.  You would still meet with the homeowner and get all of the necessary paperwork to ensure a complete short sale packet.  But after that, the ease and simplicity of outsourcing takes over.  The investor simply sends the complete short sale packet to their outsourcing company, and they are the ones that then do all of the work on behalf of the investor.

The investor’s time is freed up considerably, as they no longer have to sit on hold, fax paperwork, or do other mundane tasks associated with negotiating a short sale.  The outsourced short sale company takes care of all of this work for the investor.

Outsourcing your short sales makes perfect sense as a real estate investor.  Since the outsourcing company is working on many files for many different investors, they are building more relationships faster at a wide variety of lenders.  They have a larger rolodex of contacts at more banks, and have a proven track record of closing deals with many lenders, thereby making their files and their deals more desirable for the lender to look at.

In today’s world of outsourcing, it’s no longer necessary for a real estate investor to negotiates his own short sales.  In fact, it’s not a good use of their time.  Preforeclosure investors should be focused on buying and selling properties, not negotiating short sales or faxing documents to lenders trying to get a short sale deal closed.

Outsourcing short sales allows real estate investors to work on more deals at once, and have a virtual team of experts on his staff, without the overhead.  The best outsourced short sale companies are paid on performance, after they have negotiated the short sale deal to the price that the investor has set.  This makes outsourcing a no risk proposition for the smart preforeclosure investor.

I like many people have a home I can not afford. I am thinking of doing a deed in lieu of forclosure instead of an actual foreclosure. How will this effect my credit?

 

The first step to a good FICO score is to know you where you are at. Most people look for a way to obtain a free FICO score, but it can be tricky. There are a couple things to watch for when trying to obtain a free FICO score.

The first is when you look for a free online FICO score you are blasted with advertisements. There are so many companies looking to give you a free credit score. The true is all are not created equal. Fair Isaac developed the FICO score and it is used by ninety percent of the lenders in the country. Seeing the success of Fair Isaac, the credit bureaus decided getting into the credit score business could be profitable. Scores that are commonly offered, when you are looking to obtain a free FICO score, might not actually be a FICO score and one of these other scores. There is a hundred different way to score credit and only one is a FICO score. You just need to make sure it does say FICO and you should be safe.

The second, when trying to obtain a free FICO score, is offers that come along with the free fico score. The fact is it isn’t really free. Meaning, to obtain a free fico score, you will need to sign up for a credit monitoring program. These programs are usually free for the first month but after that you will be charged on a monthly basis.

The confusion comes from the fact Americans by law are entitled to one free credit report each year from each credit bureaus. This is does not state are entitled to obtain a free FICO score. Getting a credit score is relatively new. It was only 2003 when congress passed a law giving people the right to see their score. Before 2003, consumers were kept in the dark about their credit scores. Fair Isaac wanted to keep the score secret because they thought people would try different measures to influence their scores.

If you don’t want to sign up for credit monitoring program you will have to pay for a FICO score. Once again here make sure it does say FICO. If it doesn’t you run the risk of getting one of the other scoring models. If you still want to obtain a free FICO score you will have to sign up for one of these programs, but you do have the opportunity to cancel if you want. The first month is usually free.