Tagged: Short Sale

Staten Island Home Sales: What to Do if Your Home Is Worth Less Than the Mortgage

Many people who purchased a home prior to the economic downturn may be in a situation currently where their home is now worth less than the mortgage is on it.  When a mortgage is higher than what a home is worth it is called negative equity.  Currently a lot of homes appraise for much less than what their homes used to be worth because of the recession leaving many people with mortgages that are higher than what their home is worth.

Negative equity can affect people in many different ways.  Some people may find themselves able to still pay their mortgage and may not be affected by the negative equity situation and may eventually be able to recover from the negative equity in the long run if the worth of their home goes up. Other people may find themselves unable to pay for their mortgage anymore and may want to either try to make their monthly mortgage payments more affordable or may want to sell their home so that they do not need to make such expensive mortgage payments anymore.

When a homeowner is left with a negative equity home loan and they are unable to pay their monthly mortgage payments there may seem like there is no way out and no options to recover from the damage that has been done.  They may also feel like there is no way around this problem and may seem like you are on the bottom of a huge mountain looking up at nothing but an impossible situation.  Luckily there are options for you if you are one of these homeowners.

If you cant afford to live in your home anymore you have a couple of options that you can consider before ending up in foreclosure:

  • Loan Modification – A loan modification is when the bank agrees to modify the terms of the loan outside of the original terms of the contract.  In this option you will remain living in your home but will just have the terms of the mortgage changed to help reduce your monthly payments.
  • Short Sale – A short sale is when the bank agrees to take a lower amount for the sale of your house than what the loan has left on it.  For example if you have a mortgage with $245,000 left but you can only sell your house for $220,000 the bank will decide if the amount is acceptable if so they will release you of your lien once the sale takes place.  The bank will be loosing $25,000 but they will still be making more off of the house than if the house went into foreclosure. This process starts off similar to a regular home sale where the homeowner puts the house up for sale and finds a buyer. Once a buyer is found and a contract of sale is signed certain paperwork has to be submitted to your bank so the bank can decide if the offer for the house is acceptable to them.  If so the short sale process will continue and the house will be sold at closing.

These two choices are the best way route to go if you are unable to make your montly payments anymore and have a negative equity home loan.

For more information on loan modifications or short sales in Staten Island or Brooklyn, New York or New Jersey call 718.979.4300 or 800.976.4904 to speak with a Staten Island real estate lawyer.

Short Sales Should Eventually Become a Shorter Process

If you are a troubled homeowner who was at risk of having their home foreclosed on you may be considering something called a short sale and you may or may not be familiar with the process of a short sale.  If you are considering the process of a short sale for your home as an alternative to foreclosure it may be the best things for you because unlike a foreclosure the debt does not stay with you and it does not go on your credit report that you have been involved in a foreclosure (foreclosures stay on your credit report for 7 years).  But one thing that short sales are known for in the past are for not being short.

Short sales usually never take under three months to close.  As a matter of a fact, short sales on average take six months or longer.  Eventhough the process is worth the wait for the seller and most of the time, as long as the sale goes though, for the buyer and bank also.  But that is not to say that the wait is not a time that many wish would go buy faster.

According to a recent announcement made the Department of Treasury has decided to step in and do something that sellers can’t do when they are involved in a short sale and that is tell the banks to make the short sale process and loan modification process go by faster.  The main thing motivating the Department of Treasury to make the short sale process faster is that currently 80% of all short sales fall through because the process is taking too long and the buyer decides they no longer want the home.

Other people than the seller and purchaser will profit from changes being made to the short sale process in the future also.  Real estate agents have been reluctant to take on short sales because a lot of times it results in the realtor’s commission being decreased in order to allow the sale to go through when the lender says that they would like the house to be sold at a higher price than what the purchaser is willing to offer.  Often times the real estate agent decreases their fee in order to allow the sale to still go through – under the new short sale rules this will no longer be able to happen so realtors may be less reluctant to accept short sale deals.

Under the new short sale rules lending institutions will be required to approve or disapprove a short sale within 10 days and will also have to excuse the individual applying for the short sale from all debt obligations once the short sale is completed.  The Department of Treasurty has advised banks and lending institutions that they have until April 5, 2010 to put the new short sale rules into effect.


Purchasing an Investment Property in a Down Economy

With the housing market still in the process of recovering and housing prices still at a low it is very easy to understand why buying a house in today’s market could be beneficial to a potential home buyer.

Those considering purchasing a home as an investment property are in a great position at this point in the economy.   If you are purchasing an investment property to flip in a few years, even though you may not be able to take part in the housing credit (see why by clicking here) you are still at an advantage when compared to a few years ago when the housing market was doing well and home prices were much higher.

A recent survey by Move.com showed that the percentage of people who purchase houses because they are interested in investing in real estate have doubled since March 2009.  Among the main reasons people are being drawn to invest in a property by buying a house are affordable houses and foreclosures.

  • Affordable Prices – Low housing prices are one of the main attracting factors when people consider buying a house as an investment property at this point and time.  Right now the economy and the housing market have began to recover but have not recovered nearly enough for sellers to raise the sale price on their homes.  Those looking to purchase a home at a low price now have the opportunity to hold onto it for the next few months or years – basically until the housing market improves enough to sell the house at a higher amount – and then sell it.  Low housing prices may not only be attributed to just being low to be sold but may also be because of many family’s choosing to sell their property as a short sale.
  • Foreclosures – In recent months foreclosures have been at an all time high.  While this is bad for the people whose houses are being foreclosed on it is beneficially to people looking to invest in a house.  Buying a home at as low as a price that one may be able to find a home that is being foreclosed can be very beneficial to the purchaser.  At times foreclosures need to be fixed up and may have underlying problems that you may not be aware of but if you are will to invest money into a house and fix it up if necessary this may be a great move for an investment house.

Regardless of if you are purchasing a home for the first time or if you are looking to purchase a home to invest in the value of an experienced real estate attorney cannot be replaced.  Hiring a real estate lawyer is key when you are purchasing a property and should not be overlooked.  Make sure that the real estate lawyer you choose is knowledgeable and experienced in the type of sale or purchase that you are considering.  Always ask the attorney you are considering questions so you will know if they are the right attorney for your real estate transaction.

How to Find the Right Home in New York and New Jersey

Deciding to purchase a home is a big step that most people take at one point and time in their life.  It is a time in most peoples lives where they decide what area they want to live in, how big of a house they need and how much money they are willing to spend on the house.  Making sure that you get everything you want from your house is important, especially if you plan on living there for a while.  Most people wonder “How will I know which house is right for me?” you will want to make sure you figure out what you need in a house before looking for one this will help you and your realtor because you will both be on the same page and you will not find yourself purchasing a home that you are just “settiling” for.

So how do you know if you are buying the right house? There are many different things you will have to decide on as far as your house goes that you will want to decide and make your real estate agent aware of when you are looking for a house in New York or New Jersey. Here are some things you will want to decide on to help you find the right home in Staten Island, Brooklyn, Manhattan, Queens or the Bronx, New York or New Jersey these tips will help you find what you are looking for:

  • Decide on what type of neighborhood you want to live in.  Do you prefer to live in a quiet suburban area or in a urban area.  Suburban areas are often more quiet because you are further away from your neighbors most of the time and they are often slightly less expensive in price when compared with city houses.  Urban areas or “city” areas are often more populated and have less of a commute to work and school but also usually have slightly more expensive homes, are noisier and sometimes have higher crime rates.
  • Decide on what type of location you want to live in.  Once you have decided on whether you want to live in a city or in the suburbs you will want to decide if you prefer living on a busy street or on a more secluded street.  This is really just a personal preference if you are a person who likes it completely quiet all of the time you will want to avoid homes that are on busy streets or that are next to the highway because of the noise from the traffic, but if you are not bothered by the noise purchasing a home on a busier street is usually a few thousand dollars cheaper – just remember that since it can be purchased for thousands cheaper also means that when you sell it there is a chance it will probably sell cheaper.  You will also want to decide if you want to live on a corner lot or not.
  • Find an area with a good education system.  If you have children or plan on having them sometime in the future while you reside in the house you are considering purchasing you will want to make sure the area has a good education system.
  • Decide what type of home you want.  Are you interested in a single family home, multi-family home, condominium, townhome or cooperative (co-op)?  Single family and multi-family homes are usually quieter and have more appreciation but require a lot of maintainance.  Condominiums, townhomes and cooperative units usually require less maintainance but noisier and not as private because you share common walls and/or ceilings with your neighbors.  This category of homes is also usually less expensive than a single or multi-family home.
  • Determine what style of home you want.  Do you want a single story home, split level or a multi-level home? Deciding what type of style home you want is most commonly based on how much space you need, what type of layout you find more appealing, whether or not you have medical conditions that prohibit you to one floor, whether you feel safer in a one floor home or a multi-story home and if a multi-floor home is more or less convienient for your daily activities.
  • Decide what interior specificiations are important to you.  You will want to determine what specific needs you and your family have and what they need from the house for everyday living.  How many bedrooms do you need?  Will you need extra bedrooms in the future for a baby, in-law or parent?  Do you need a guest room?  Is one bathroom okay for your family or do you require 2 or only 1 1/2 bathrooms?  Determining the specific needs your family has will help you decide what qualities you need inside of your house.
  • Figure out if you want a home that is newer and will require less fixing or if you are looking for a “fix-up” home.  Regardless of whether or not you are buying a home that is apparent that it needs to be fixed up or if you are looking for a home that requires little to no repairs you will always want to make sure you have an engineers inspection (home inspection) done to make sure there are no “hidden problems” but deciding if you want to pay less for a home that needs to be fixed up or if you want to spend a little extra and purchase a home that is newer and does not require and fixing up will not only help you in the long run but will also help you map out the amount you may need to invest in the house to fix it up.
  • Try to figure out if there are any “little things” that are important.  Determining if there are any small things that will be a make or break the deal is important to figure out before hand also and sometimes are not thought about until the purchase process is already occuring. A few things to consider are does the house offer gas or electric heat, does it have central air or will you have to put a window unit in, do you want a swimming pool, if you are buying a condo or co-op are you allowed to have pets, are you willing to buy a house if it is a short sale or a foreclosure? – there are many questions that you may want to figure out the answers to before making a final decision and signing a binder for a house.

Experienced Staten Island & Brooklyn Real Estate and Refinance Attorney | Government Funds for Repairs to Your House If You Are Purchasing a Home or Refinancing

The government has created a fund that can be used as a home improvement fund as long as you qualify under their conditions.  The fund is called the FHA 230K Home Loan.

The purpose of this loan is to help homeowners make repairs to their homes and better their properties.

This loan can be used in a variety of different circumstances such as

  • Purchasing a Staten Island or Brooklyn home that is being sold as a short sale and needs repairs
  • Purchasing a home and moving it to a new site and repairing it
  • Refinancing your existing Staten Island or Brooklyn property and repairing your home.

The FHA 230K Home Loan requires that you take out a minimum loan of $5,000 for repairs.

If you were undecided about purchasing a Staten Island or Brooklyn property or refinancing your home now may be the time for you to move forward with your plans.  Contact Steven T. Decker, an experienced and well known Staten Island & Brooklyn New York Real Estate Attorney, for more information on purchasing a home, the sale of your existing home, refinancing, modifying your loan or purchasing a short sale.  For more information on the eligibility requirements for this “Home Fix-up Loan” click on the link below.