If you are one of the lucky ones to have bought your home in Arizona long before the mortgage crash and you didn’t happen to pull money out when your home’s value ran up a few years ago you may have some refinancing options that other folks may not.

Interest rates are still attractive to make refinancing a your mortgage a smart choice under some circumstances. But to take advantage of streamline low va rates and programs, FHA mortgage refinancing or Conventional loan refinancing programs you need to be sensible and practical about what you want and can do.

To get the most out of your refinancing quest if you have the equity use the following tips to help you get the best deal.

1. Start with your credit. This is simple – the better your scores the better interests you can get. There are thresholds to cross like 620, 660, 700 and 740 for example. There is plenty of information on the Internet to help you get your scores up like: pay down debt, increase your credit card limits, don’t close older cards, don’t open new accounts, and don’t pay collections that are older than 1 year just before and during the mortgage application process.

2. Use a shorter lock period. This is a tricky suggestion, but if you can get your refinance mortgage approved before you lock your interest rate you can lock for a short period which can improve your interest rate or reduce the amount of money your mortgage company charges you. Either way, if you are going to use a shorter lock period you’ll have to work closely with your mortgage loan officer.

3. Shorten up your loan terms. If you can reduce the amount of time you’ll be paying your mortgage back, you’ll save money in the long run by paying less mortgage interest. Shorter term mortgages typically offer a slightly better interest rate for the same mortgage loan amount. What comes with a shorter term however is a higher payment for the same loan amount. Make sure you compare the differences between loan terms to see if a short term works for your budget.

With the three tips you can save some money on your next mortgage through a refinance. Hopefully you are one of the lucky ones who still has some equity left to allow you the opportunity to take advantage of lower rates while they last.

One of the biggest advantages of a VA loan is that you don’t have to have a down payment. A VA loan has no property restrictions, meaning you can buy in urban and rural areas except for trailer parks. There are also no income restrictions for the Veteran so you can make $200,000 a year and still buy a home going VA with no down payment.

Why is income and property restrictions even an issue?

The reason I bring this up is because the only other loan that exists that will allow no down payment is the USDA loan. This loan can only be used in certain areas, mainly rural areas and smaller towns, and it has limitations as to how much money you can make depending on the state and county that you reside.

• What about a Conventional or FHA Loan?

These two loans require at least a 3% down payment and they also have mortgage insurance. Mortgage insurance ads an additional $130 or so to your monthly payment or more depending on your loan size. VA loans do not have mortgage insurance.

Conclusion: VA has no down payment requirement so you can finance 100% of the sales price. You can buy anything from stick built homes to manufactured homes on their own property to approved condos and townhomes either urban or rural. Lastly, regardless of how much money you make you can utilize your VA loan.

Update:  Bank of America has postponed foreclosures in all 52 states until it can review their policy on foreclosures.  Other banks are considering this same move to review policy.  This is a move that could impact real estate sales throughout the country.

Arizona is Not Postponing Foreclosures.  Four lenders — Bank of America, JP Morgan Chase, GMAC Mortgage,  and Wells Fargo — are under the spotlight for supposed document flaws in processing bank foreclosures. Reports have said that the flawed foreclosure cases are in 23 states where courts oversee foreclosure.  In many states, no courts are involved and the lenders are able to repossess a home with a mortgage that’s in default without going to court.

At Bank of America, An Official Acknowledged She Signed Up to 8,000 Foreclosure Docs a Month and Typically Didn’t Read Them.  Many other Horrifying stories at other banks has caused this new mess at major banks.

There are three different scenarios that could make the housing market tank if not resolved soon.  In the best case scenario, the issues are simply technical, the situation is resolved and the foreclosure process continues. Many believe housing won’t recover until the glut of foreclosed homes clears the market.
In the medium-case scenario, litigation ensues and the matter takes years to sort out. That will inflict more pain onto the already troubled housing market.
In the worst case, the issues become a “systemic problem” that grinds the mortgage market to a halt and title insurers refuse to insure mortgages involving existing homes. In other words, housing Armageddon.  “It would be devastating for the resale market if this robo-signer issue spiraled out of control,

These are states that allow only judicial foreclosures at this time, other states may be added or deleted as the banks figure out where they stand on these foreclosures.

Connecticut, Delaware, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin

Approximately 74% of all home sales in the current Phoenix/Mesa Arizona real estate market are either Short Sales or REO’s.  The Arizona real estate market was the 5th hardest state hit in 2009 for foreclosures.  Only Nevada, Florida, California and Michigan surpassed Arizona in all foreclosures.  In May of 2010, our local MLS (ARMLS) showed the following home sales in Arizona.

• 49% Active Short Sales Listings up 137% from 2009
• 19% Pending Short Sales Listings up 200% from 2009
• 20% Closed Short Sales Listings up 246% from 2009

Obviously all of this is very troubling for the home owner.  However, there are many useful internet sites available to answer questions you might have regarding selling your home in today’s distressed real estate market.  A number of these web sites are listed below.  Please take the time to browse the information provided within these web sites before making any decision regarding selling your home.  Should you ever have any questions, please feel free to call us at 480-985-5442.

• hopenow
• www.hud.com
• www.makinghomesaffordable.gov
• freddiemac
• fanniemac
• efanniemac
• realtor.com
• Homesweetaz

We are hearing that the Arizona real estate market should be recovering by 2014.  With this in mine, this is a great time to be a home buyer in Arizona.  This is based on all of the homes being sold at bargain prices in the Valley.  By 2014 many of these homes will have appreciated and these buyers will become home seller’s looking for a new home.

Reply to question:

” I read over your article regarding short sales and security clearances; I have a question about deed in lieu of foreclosure and how it would affect the renewal of a security clearance. I am in Alabama, but the way if affects an individual should be the same regardless of state.”

Thanks for reading our website… Not completely sure of your current situation with your home in Alabama. Should you be in a time where you are needing too sell this home and you are “upside Down” on the property, I would recommend finding an experienced real estate agent/broker who has successfully completed several short sales. If you can find an agent who has completed the “Certified Distressed Property Expert (CDPE)” designation that would also be beneficial to you.

I cannot give legal advise, or comment on you clearance with the DOD. But what I do know is that during the review on your background file, they do complete a credit check. We have just successfully completed a short sale with a young family in the Military. The banks realize that this is an issue and should work to help you successfully complete the short sale process. I would recommend trying to avoid any foreclosure or deed in lieu as they are the same and will impact your credit score in the negative. Additionally I would contact you’re commanding officer (CO) and notify them of this pending issue. He might also be able to direct you in a direction of support. We understand that this dilemma is now affecting every income level. In our real estate market (Phoenix, Az) , over 65% of all real estate sales are now either Short sales, or foreclosures. When the decision is made to go for a short sale, it is very important to write a strong “Hardship Letter” that the banks require and state your hardship, including the fact that you are in the military and this could affect your future in the military.

How Will Foreclosure or Short Sale Affect My Credit Score and Credit Report?

Foreclosure or Deed-in-Lieu of Foreclosure – Both of these will affect your credit report and scores the same. The status of your overall credit when you either fell behind or will fall behind on your mortgage has an impact on the amount your credit scores will fall, which is usually between 200 to 300 points. The effect on your credit report and scores due to a foreclosure or a deed-in-lieu of foreclosure will be minimized if you had credit scores higher than 700 with impeccable credit history than if your credit was unfavorable.
Short Sale – Your payment history with your lender and how it is maintained will influence what happens to your credit rating during a short sale. If you do not become delinquent on your mortgage payment as you go through the short sale process then your credit should be minimally affected by a short sale. However, if you fall behind on payments during this time, your credit report and credit report will decrease sharply based on the number of payments on which you fall behind. Conversely, it will not be as bad as what you will suffer if you experience a foreclosure.

We wish you the best and if we can help find you an agent in your area to help you, please let us know.

Short Sale vs Foreclosure – Should I care??
Yes, With our current economy causing difficult times for many, it can feel like there are nothing but bad choices. However, some are not as bad as others. If you are finding yourself having difficulty with keeping up with your mortgage you do have some choices. We are continuing to educate ourselves so that we can offer you the best advise available. If we do not have the answer, we have a network of professionals who can help.

Short Sale: Even if you are behind on your mortgage or don’t think you can sell your home for as much as you owe, we may still be able to help you sell your home and get out from under your loans. A short sale is when you sell your home for less than the total amount you owe the lender(s). The process can be arduous but you avoid a foreclosure and generally will face less negative consequences on your credit score. We have successfully negotiated short sales and have usually gotten the lenders to forgive the shortfall on the payoffs.

We will help you through every step of the process. The lenders generally require several years of tax returns, bank statements, and a letter explaining why the loan cannot be paid in full (a hardship letter). We will help you on each step so that we can present a complete package to the lender(s).

Foreclosure: Foreclosure is when the bank actually goes through the process with the public trustee to sell a property at auction. The process starts when the Public Trustee sends a Notice of Election and Demand. From that point it can be as little as 120 days before the property is sold at auction. Frequently the bank ends up with the property. Even if the process has started, you may still be able to sell your home – if we can get an offer, most lenders will pause (delay) the foreclosure proceedings, giving more time to complete the sale.

Foreclosure can a have significant effect on your credit score, ability to obtain loans, and even security clearances. Should you currently hold a security clearance, please try to avoid a foreclosure at all costs, losing your clearance could cost you your job.

For example:

–foreclosure will lower your credit score 250 to 300 points for 3 years while a short sale might only drop your score 50 points for 12 to 18 months (because of late payments),

–foreclosure will make a potential homeowner ineligible for some loans for 5 years while the short sale may only affect eligibility for up to 2 years.

Over the past several months we have taken seminars pertaining to Real Estate marketing. The current buzz word is all about the social media. For those of us who are Realtors®, ActiveRain blogs appear to the most popular media site. However, it’s also the latest rage to be tweetered on Twitter, have a Facebook friend, or get LinkedIn. While social media continues to grow in popularity, and worthwhile for many reasons, it’s vital that Realtors not forget about the good old tradition of social networking.

Yes, that’s right – meeting people face-to-face, in person! Before the Internet age, many real estate professionals relied on getting out of the office to professional meetings to network, greet fellow colleagues (not to mention, prospects) and build relationships.

Building relationships – that’s what it’s all about and especially in today’s economy. And today, more than ever before, it’s important that Realtors “meet & greet,” shake hands, pass out business cards and have a personal conversation with potential buyers & sellers – not just one that’s typed in an e-mail.

Professionals in all fields of the business sector are starting to realize, especially in this economy, that you have to get out, put your face out there, build your credibility so you can not only grow your own business, but help others with new contacts.

So, if you’re a Realtor or other professional who is seeking new clients/friends, and is online typing away on different blog sites such as ActiveRain, Facebook, Twitter, LinkedIn, or whatever your social media of choice, good for you. However, don’t forget to put yourself OUT THERE in the public among potential prospects who might just appreciate meeting you in person, having the opportunity to shake your hand and laugh together out loud instead of “LOL” online.

There are MANY organizations available that hold networking events and/or need your involvement on a committee or council. Just today my wife suggested that I join the Mesa Leadership, Training and Development organization. This is a direction that I plan on following to both help our community but could also help our business.

It’s sad to see so many people, both friends and clients so discouraged about the looming possibility of losing their home; they ignore the less destructive option of a short sale and instead go to foreclosure (which takes many years to recover from). In desperation, many people try selling there home themselves to save on realtor’s commissions, pricing it just above what they owe, only to end up in foreclosure anyway.

You should know, and share with anyone who needs to know, that a homeowner can avoid a foreclosure if they act quickly. We’ve helped many homeowners this year avoid foreclosure by negotiating a short sale for them. Some people just don’t understand the detrimental effects of foreclosures, or are afraid of considering a short sale because they think it will cost them more money. We’d like to dispel some of the myths, and clarify how we can help. Here are some facts that show the benefits of a short sale compared to a foreclosure. We hope that the below information will help you in your decision making process.

Call us today if you or anyone you know needs help selling or buying real estate in the Phoenix/Mesa area. The information provided is from the Certified Distressed Property Institute of which we are members.

An important consideration when you are faced with a short sale or foreclosure on your home in Phoenix Arizona is what the outcome might be on your credit report. You also want to think about how long your credit rating will be negatively affected by a short sale or foreclosure.

The unfortunate fact is that foreclosure or deed-in-lieu of foreclosure will have a very adverse effect on your credit score even if you are only 30 days. The damage to your credit report gets worse as you go longer with your mortgage delinquency.

How Will Foreclosure or Short Sale Affect My Credit Score and Credit Report?

• Foreclosure or Deed-in-Lieu of Foreclosure – Both of these will affect your credit report and scores the same. The status of your overall credit when you either fell behind or will fall behind on your mortgage has an impact on the amount your credit scores will fall, which is usually between 200 to 300 points. The effect on your credit report and scores due to a foreclosure or a deed-in-lieu of foreclosure will be minimized if you had credit scores higher than 700 with impeccable credit history than if your credit was unfavorable.

• Short Sale – Your payment history with your lender and how it is maintained will influence what happens to your credit rating during a short sale. If you do not become delinquent on your mortgage payment as you go through the short sale process then your credit should be minimally affected by a short sale. However, if you fall behind on payments during this time, your credit report and credit report will decrease sharply based on the number of payments on which you fall behind. Conversely, it will not be as bad as what you will suffer if you experience a foreclosure.

What is the Waiting Period Before Buying Another Home?

What you plan to do after your short sale or foreclosure is an essential part of your decision-making process. You need to consider carefully which alternative you will take if you are planning to buy a home soon after your short sale or foreclosure. Your credit ratings will suffer as a result of either a foreclosure or a short sale. However, a foreclosure has a far more reaching impact on your credit report and ability to purchase a house than a short sale.

• Foreclosure or Deed-in-Lieu of Foreclosure – If you lose your home to a foreclosure or deed-in-lieu of foreclosure you will end up waiting between 36 and 60 months to buy another home.

• Short Sale – The short sale may be the best option if you want to buy a house soon afterwards. Your ability to buy a home within the first two years after your short sale will depend on your credit history (primarily your mortgage payment history). If you have kept your mortgage payments current with no payments more than 30 days late and did not agree to repay the debt relief, then Fannie Mae will allow you to immediately apply for a mortgage to purchase another home.

Foreclosure or Short Sale Decision

The decision between a foreclosure or a short sale is dependent on your mortgage and credit history leading up to the event. If you need to sell your home but owe more than it is worth, and your credit history is impeccable then the short sale is the best plan for you. If your history is negative, and you have no immediate need or plans to own your own house in the near future, then a foreclosure may be a better alternative. If it is possible, however, consider a short sale as it is the least damaging when it comes to your credit rating.

To find out more about your options of a short sale versus a foreclosure contact Arizona CDPE Experts: Rob Lanterman or Roxanne Pierson

What We Can Do For You In The Real Estate Market In Arizona

We have over 26 years of combined experience in selling residential real estate in both Arizona and Colorado.  We continually attend educational classes to keep abreast of the ever-changing world of real estate, Arizona legislation and advances in real estate that affect our local real estate market. We recently earned the Certified Distressed Property Expert (CDPE).  certification to help our clients who have fallen on hard times with their homes due to the falling real estate home values.

This certification has provided both knowledge and know how on all aspects of “Short Sales”.  With this information we are able to give our clients the best possible results for a bad situation and help them to move on with their lives. Fortunately with our experience and knowledge we have a high success rate in selling “short sales”. If you or anyone that you know would like information on selling a home by short sale as opposed to foreclosure please give us a call or drop us an email.

And by the way, we have a lender that can provide a loan after a completed short sale.  Every case is different so let us know before you miss any loan payments.