Author Archives: Veronica Hanna

Update: Buying a House after a Short Sale

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There are many factors that will affect your ability to qualify for a loan in order to buy a house again after a short sale. If you have taken good care of your credit since, paid all your bills on time in the last 12 months, have money saved for down payment (as little as 3.50% to 20% down payment),  and of course, you have income to qualify after a short sale, then yes, it is possible to buy a house again in as little as 12 months to 36 months after a short sale.

How Long Do I Have To Wait After a Short Sale Before Buying a House?

Here are your loan options to buy a house after a short sale

Buying a House with an FHA loan one year after a short sale with 3.5% down payment

Did you know? FHA  announced on August 15, 2013 that  you may only need to wait one year to be able to buy again under the FHA’s Back to Work Program. FHA is willing to back loans for borrowers with as little as 3.50% down payment after having had a short sale, bankruptcy, or foreclosure. This is subject to guidelines such as having experienced an Economic Event which is beyond your control that results in a Loss of Employment, Loss of Income or a combination of both, which causes a reduction in the your Household Income of 20% or more for a period of at least 6 months. Note: If you did a prior short sale or were delinquent on a prior FHA loan, you will not be able to buy after one year with this program using an FHA loan.

With FHA’s prior guidelines, you can buy a home immediately after a short as long as the mortgage and existing debt has zero late payments in the past 12 months. Extenuating circumstances that lead to your short sale will also have to be documented such as certain hardships like job loss and subsequent job transfer/ relocation at least 2 hours drive time from prior residence, catastrophic medical bills (and/ or possible death) incurred by a member of the borrower’s “nuclear family.

Buying a House with a Conventional Loan TWO years after a short sale with 20% down payment

You can buy a house after  two years with a 20% down payment using a conventional loan. While waiting 2 years after your short sale, you should get to work on improving your credit rating and saving for down payment. Saving for a 20% downpayment not only helps you buy a home sooner after a short sale, but helps avoid expensive mortgage insurance on loans with less than 20% down payment. With Fannie/Freddie Loans, you will have to wait 4 years if you only have 10% down payment or possibly wait just 2 years if you have extenuating circumstances that lead to the short sale of your home.

Buying a House with a VA Loan TWO years after a short sale with Zero Down payment

You can buy a house after a short sale on a VA loan after 2 years for most lenders. For some VA lenders, the waiting period after a short sale can be as little as one month if you have not been late on any mortgage payments before  the final short sale and you have a 660 or better credit score. You might also qualify for an automated underwriting approval and get a VA loan.  Please work with a VA lender to see about your specific situation. Feel free to contact any of the lenders that you trust who are familiar with helping buyers with a short sale history. Let us know if you need us to recommend lenders that we trust who have successfully helped our buyers finance the purchase of their homes.

Buying a house in 2014 after your short sale in 2010, 2011 or earlier years

Those who have completed a short sale in 2009, 2010, 2011, and earlier years are most likely ready to apply for a loan after a  3 year waiting period has passed from the date of the short sale. You may now be able to buy a home again in 2014 and apply for a loan without consideration of any special circumstances. You will want to watch the video below and read the tips below to qualify for a loan after a short sale.

Article taken from January 25, 2014  by

 

Updated Sold Chart from ARMLS

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6_13 sold chartCheck out the lastest homes sold chart! Our inventory is very low! As of today their are 12,997 Active (Residential Single Family Home) Listings in the entire Arizona Regional Mulitple Service. In June 2013 there were 6,924 (Residential Single Family Home) Sold!

For more stats go to http://armls.com/statistics/market-reports

(Click on above image to open PDF)

 

What about the 3.8 % TAX on investment income?

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From the National Association of REALTORS®

information regarding the 3.8 % tax:

Top 10 Things You Need to Know About the 3.8% Tax

  1. When you add up all of your income from every possible source, and that total is less than $200,000 ($250,000 on a joint tax return), you will not be subject to this tax.
  2. The 3.8% tax will never be collected as a transfer tax on real estate of any type, so you’ll never pay this tax at the time that you purchase a home or other investment property.
  3. You’ll never pay this tax at settlement when you sell your home or investment property. Any capital gain you realize at settlement is just one component of that year’s gross income.
  4. If you sell your principal residence, you will still receive the full benefit of the $250,000 (single tax return)/$500,000 (married filing joint tax return) exclusion on the sale of that home. If your capital gain is greater than these amounts, then you will include any gain above these amounts as income on your Form 1040 tax return. Even then, if your total income (including this taxable portion of gain on your residence) is less than the $200,000/$250,000 amounts, you will not pay this tax. If your total income is more than these amounts, a formula will protect some portion of your investment.
  5. The tax applies to other types of investment income, not just real estate. If your income is more than the $200,000/$250,000 amount, then the tax formula will be applied to capital gains, interest income, dividend income and net rents (i.e., rents after expenses).
  6. The tax goes into effect in 2013. If you have investment income in 2013, you won’t pay the 3.8% tax until you file your 2013 Form 1040 tax return in 2014. The 3.8% tax for any later year will be paid in the following calendar year when the tax returns are filed.
  7. In any particular year, if you have no income from capital gains, rents, interest or dividends, you’ll never pay this tax, even if you have millions of dollars of other types of income.
  8. The formula that determines the amount of 3.8% tax due will always protect $200,000 ($250,000 on a joint return) of your income from any burden of the 3.8% tax. For example, if you are single and have a total of $201,000 income, the 3.8% tax would never be imposed on more than $1,000.
  9. It’s true that investment income from rents on an investment property could be subject to the 3.8% tax. But: The only rental income that would be included in your gross income and therefore possibly subject to the tax is net rental income: gross rents minus expenses like depreciation, interest, property tax, maintenance and utilities.

10. The tax was enacted along with the health care legislation in 2010. It was added to the package just hours before the final vote and without review. NAR strongly opposed the tax at the time, and remains hopeful that it will not go into effect. The tax will no doubt be debated during the upcoming tax reform debates in 2013.

PDF format of these 10 points and examples:
http://www.ksefocus.com/billdatabase/clientfiles/172/4/1609.pdf
http://www.ksefocus.com/billdatabase/clientfiles/172/8/1437.pdf

Arizona +16.6% Appreciation!

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CoreLogic’s July Statistics Had some positive news for Arizona. For complete article visit: http://www.corelogic.com/about-us/news/corelogic-july-home-price-index-rises-3.8-percent-year-over-yearbiggest-increase-since-2006.aspx

Highlights as of July 2012:

  • Including distressed sales, the five states with the highest appreciation were: Arizona (+16.6 percent), Idaho (10.0 percent), Utah (+9.3 percent), South Dakota (+8.3 percent) and Colorado (+7.3 percent).
  • Including distressed sales, the five states with the greatest depreciation were: Delaware (-4.8 percent), Alabama (-4.6 percent), Rhode Island (-2.2 percent), Connecticut (-1.7 percent) and Illinois (-1.7 percent).
  • Excluding distressed sales, the five states with the highest appreciation were: Arizona (+11.3 percent), Utah (+10.5 percent), Montana (+9.1 percent), South Dakota (+8.6 percent) and North Dakota (+6.9 percent).
  • Excluding distressed sales, the five states with the greatest depreciation were: Delaware (-3.5 percent), Alabama (-2.4 percent), New Jersey (-1.2 percent), West Virginia (-0.5 percent) and Connecticut (-0.2 percent).
  • Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to July 2012) was -27.2 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -20.2 percent.
  • The five states with the largest peak-to-current declines including distressed transactions are Nevada (-56.0 percent), Florida (-44.2 percent), Arizona (-42.8 percent), California (-38.0 percent) and Michigan (-37.4 percent).
  • Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 23 are showing year-over-year declines in July, four fewer than in June.

*June data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.

Full-month June 2012 national data can be found at http://www.corelogic.com/HPIJuly2012.