The Truth About Bankruptcy

"Bankruptcy. That word sends chills up the spine. If you're facing the prospect of bankruptcy or in the middle of it right now, you know it's a living nightmare. It can devastate your job, destroy your marriage and steal your peace of mind." Quote from Dave Ramsey

I find in this day and age, bankruptcy is often thought of as an "easy way out."  But I have personally seen the stress of going through a bankruptcy destroy lives, marriages, and families.  Bankruptcy should be avoided if at all possible. However, I realize that in some instances bankruptcy may be the only option.

Bankruptcy also destroys your credit. Dave Ramsey states that "Chapter 7 Bankruptcy, which is total bankruptcy, stays on your credit report for 10 years. Chapter 13 Bankruptcy, more like a payment plan, stays on your credit report for seven years. Bankruptcy, however, is for life. "

Want to purchase a home?  Another negative impliction arises when someone who has gone through bankruptcy wants to purchase a home. To qualify for a home loan using an FHA loan, the bankruptcy has to have been discharged for 2 years on a Chapter 13 or 4 years on a Chapter 7 bankruptcy.  To purchase a home using conventional financing, the bankruptcy must be discharged for 4 years.  After a bankruptcy, the prospective borrower must have either established new credit or have no credit at all in order to qualify.  There can be NO derogatory credit issues when a credit report is pulled.  Bankruptcy is NOT an easy way out.

According to an article written by Dave Ramsey, "Bankruptcy is listed in the top five life-altering negative events that we can go through, along with divorce, severe illness, disability, and loss of a loved one. I would never say that bankruptcy is as bad as losing a loved one, but it is life-altering and leaves deep wounds both to the psyche and the credit report."

If you are considering a bankruptcy or have gone through a bankruptcy, click on the link below for the "rest of the story."

Myth: I'll just file bankruptcy and start over; it seems so easy.

Truth: Bankruptcy is a gut-wrenching, life-changing event that causes lifelong damage.

The Truth About Bankruptcy

Great Article from HouseLogic on maintaining your deck. Enjoy!

• 

  Care and Maintenance of Your Deck

  Annual deck maintenance will forestall repairs, protect your investment, and boost your enjoyment of your outdoor space. Read

Visit houselogic.com for more articles like this.

Copyright 2012 NATIONAL ASSOCIATION OF REALTORS®

Keep my Tennessee Home - Tennessee's Hardest Hit Fund

I have been asked and have agreed to serve on the Realtor Advisory Board for the Tennessee Housing Development Agency (THDA). I am excited about this opportunity and look forward to working with THDA in streamling current programs and developing future programs to assist low to moderate income home buyers in Tennessee. THDA offers many programs to assist low to moderate income home buyers and existing home owners through downpayment assistance programs, home owner education classes, foreclosure prevention assistance, etc.

Following is information about one of those programs you may not be familiar with. If you have experienced a job loss or substantial pay decrease and are having difficulty meeting your mortgage obligations, there may be help through THDA and the Keep My Tennessee Home - Tennessee's Hardest Hit Fund program. The following information outlines the program and qualifications necessary to be considered for the program. If you or someone you know needs assistance and feel these qualifications are met, please contact me and I will have a loan officer who is participating in the program contact you.

http://www.thda.org/

The Keep My Tennessee Home - Tennessee’s Hardest Hit Fund program provides loans to unemployed or substantially underemployed homeowners who, through no fault of their own, are financially unable to make their mortgage payments and are in danger of losing their homes to foreclosure. Tennessee is one of 18 states plus the District of Columbia that are receiving Hardest Hit Funds due to having an unemployment rate that is higher than the national average. The Keep My Tennessee Home program will make homeowners’ payments on their mortgage and mortgage related expenses such as property taxes, homeowner insurance, homeowner association dues,and/or past-due mortgage payments that accumulated during a period of unemployment. The Hardest Hit Fund is being administered in Tennessee by the Tennessee Housing Development Agency (THDA).

Homeowners who qualify for financial assistance may receive up to 18 months of monthly mortgage payments and/or funds to pay past due mortgage payments to bring the mortgage current; these funds are paid directly to the loan servicer/lender.

To qualify for the Keep My Tennessee Home program, a homeowner must meet the following eligibility requirements and the homeowner’s servicer must be participating in the Keep My Tennessee Home program:

• Be unemployed or underemployed (a 30% reduction of income) through no fault of their own. The event or incident which results in unemployment or substantial underemployment must have occurred after Jan. 1, 2008.
• Have a mortgage for a single-family home or condominium (attached or detached) in Tennessee that they occupy as their primary residence. This includes manufactured homes on foundations permanently affixed to real estate that they own.
• The combined amount of your mortgage principal, interest, taxes and insurance must be greater than 31% of your household income after the job loss/reduction of income.
• Not have more than six months' reserves of liquid assets, that is, liquid assets equal to six months of their mortgage principal, interest, taxes and insurance.
• Have a household income less than $74,980.
• Have a total unpaid principal balance not exceeding $226,100.

Above are the basic eligibility criteria. Meeting these criteria does not guarantee eligibility for the Keep My Tennessee Home program.

NOTICE: If anyone seeks to charge you a fee to help you with applying for assistance from this program, please report this immediately to your local counseling provider and/or the Tennessee Housing Development Agency.

For more information on this program or others, feel free to contact me or visit the THDA website at http://www.thda.org/.

Buying a Home? Is it the Right House?

Owen and I enjoy assisting our clients purchase their dream home and we have been doing so for quite a few years now. It’s such an exciting adventure to search for that “perfect” home. If you have ever bought a home, I’m sure you know what I’m referring to. Remember how excited you were to find just the “right” home and falling in love with it – your dream come true. But… Wait, don’t let your emotions get in the way of a rational decision. Here are a few questions to answer before you make the commitment to purchase that dream home.

1. Price. Can you really afford it? Your loan officer says you can qualify to purchase the home, but are you comfortable with the monthly payment. What will the utilities be? Is there a home owner’s association and if so, how much a month are those fees? Do you have enough in reserve to cover your down payment and closing costs? What about repairs or updates you want to make? Do you have the wherewithal to do them? The last thing we want is for a client to purchase a home and become “house poor.” In other words, you don’t have enough money to go out to eat, or to a movie, or for general maintenance on the home, or replace or repair appliances, etc. I’m sure you get the picture.
2. Condition. Be sure to consider the condition of the home. If the floor plan is perfect, but there are many repairs/upgrades that need to be done, is it worth it? A fixer-upper home with a lot of potential can be a money trap in the long run - not to mention the stress of making the repairs while living in the home. A new roof or new heating/air unit can be very costly.
3. Size/Layout. Is the flow of the home right for your lifestyle and are the rooms the right size? Is one bath enough? If not, and you like everything else about the home, what will it cost to add the second bath? How much inconvenience will you and your family experience while construction is going on to add the additional bath. Again, is it worth it?
4. Resale Potential. You absolutely love the home and plan to live in it forever. However, statistics show that most people move to a new home every 5 to 7 years. If you decide to sell your home or, because of unforeseen circumstances had to sell it, how easy will it be to find a buyer who will want to purchase it? Will that steep hill in the backyard be a hindrance?
5. Ammenities. Some people fall in love with expensive home amenities that seem attractive and desirable at the time, but later prove to be more headache and costly than anticipated. Do you really want a swimming pool? Would a neighborhood pool be more desirable? What about those commercial-grade built-in kitchen appliances? Expensive hardwood floors?
6. Location. Be sure to check out the neighborhood you are considering. Are you comfortable with the schools? Is it close to places you go on a regular basis? If you have children, are there children in the neighborhood for them to play with?

These are just a few questions you need to answer whether you are a first time home buyer or not. Be sure to consult with a REALTOR® to help guide you through the home buying process.

The Vote is in - Americans Place High Value on Home Ownership

According to a recent poll conducted on behalf of the National Association of Home Builders, Congressional hopefuls need to listen to the voice of the people in their districts.  73% of voters are opposed to eliminating the mortgage interest deduction and 68% of voters say they are less likely to vote for a candidate who proposes to abolish the mortgage interest deduction.  "With the 2012 election season in full swing, candidates runing for the White House and Congress would be wise to heed the will of the American Voters, who have expressed broad support for government policies that encourage home ownerhsip and oppose efforts to make it more difficult to get a home loan and tamper with the mortgage interest deduction," says Celinda Lake, president of Lake Research Partners.

Among other key findings in the report, 96% of home owners are happy with their decision to own and 84% who are "underwater" or owe more than their home is worth, expressed the same sentiment.

Job uncertainty, saving for a downpayment, and closing costs are reported to be the biggest barriers to home ownership.

Even in a depressed housing market, the American dream of homeownership remains a core American value.


Click Here to Read the Entire Article

Termites: The Silent Invader

Due to the high humidity in the Memphis area, we normally say you either have a termite contract or you have termites or... You may have both!  Termites cause thousands of dollars in damage to homes and in some cases make a home unsellable.  Homeowners are unaware there is a problem until the damage is already done.

Here are some tips to prevent termites from attacking your home:

• Repair any roof or plumbing leaks as soon as possible. These leaks can allow termites to survive above ground in a house.
• Eliminate any wood-to-soil contact around your foundation and remove wood debris near your home.
• Prevent mulch and soil from touching the siding of your home. They make it much easier for termites to enter.
• Store firewood away from your home.
• Use mesh screens on all windows and doors, as well as in ventilation openings for attics and crawl spaces.
• Seal nail holes and cracks in exposed wood to help prevent easy access by drywood termites.
• Contract with a professional pest control company to regularly inspect your home. This will help detect termite activity and allow for prompt and proper treatment.

Click on the link below to find out more information on identifying and preventing termite infestation...

Termites - The Silent Invaders

Rental History: More Important in Getting a Mortgage?

Due to tighter requirements from lending institutions, it is harder to qualify for a home loan than in years past making the American Dream unreachable for many consumers.  However, if you are renting and plan to buy a home for the first time later this year, your chances of qualifying for a mortgage might be better if you’ve had a history of paying your rent on time, the New York Times reports.

According to an article earlier this week in the New York Times, last year Experian, one of the three leading credit-reporting companies, added a section to millions of credit reports showing on-time rent payments, which had a positive impact on the credit scores to some on-time rent payers.  Now the other two credit reporting companies are following suit.

CoreLogic and FICO recently announced they are also adding a score that reflects payment histories from landlords, The New York Times reports.

Evidence of positive rental payments could be a plus for consumers, Joanne Gaskin, FICO’s director of product management global scoring, told The New York Times.

Nearly half of high-risk consumers saw an increase of 100 points or more after their rental history was added to their credit report, says Brannan Johnston, the managing director of Experian’s rent bureau. Consumers with average or higher credit scores, on the other hand, did not see any major difference to their scores.

For former home owners who lost their homes to foreclosure, may be able to rebuild their credit histories more quickly now by showing they are “very responsible renters,” Tim Grace, senior vice president of CoreLogic, told The New York Times.

Read the entire article from The New York Times ...

New York Times Article

30-Yr. Mortgage Rate Drops to Record Low

I just read an article in today’s Memphis Business Journal. According to the article, “2012 looks to be another year of opportunity for the few who can afford to buy or refinance a home.” Interest rates are incredibly low, but due to the more stringent loan requirements fewer people can actually afford to take advantage of the rates. However, investors and home buyers who have adequate income and good credit are able to take advantage lower home sale prices plus great interest rates. In spite of the more stringent loan qualification requirements though, the Memphis market has seen an increase in home buying activity. Pending sales are up.

Loan officers I have talked with say they are finding themselves assisting more clients with credit repair issues than ever before. Given the current economy, that makes sense. Because of a lost job or decrease in income, many people have resorted to credit cards to pay bills. Many consumers must pay off or pay down credit cards to qualify for purchasing a home.

Some consumers confide they are fearful to purchase a home. They have seen home prices decline, and thus don't want to run the risk of purchasing a home that may be worth less when they decide sell. In my opinion owning a home is still a much better investment than renting. There is much to be said for pride of ownership. I think the housing market will see increases in the future. Consumers who can purchase in today's market and decide not to, may regret their decision when interest rates and home prices begin to increase.

“2012 looks to be another year of opportunity for the few who can afford to buy or refinance a home.

The average rate on the 30-year fixed mortgage fell to 3.91 percent this week, Freddie Mac said Thursday, Jan. 5. That matches the record low reached two weeks ago.

The average on the 15-year fixed mortgage ticked down to 3.23 percent from 3.24 percent. That’s up from 3.21 percent two weeks, also a record low.

Mortgage rates are lower because they tend to track the yield on the 10-year Treasury note, which fell below 2 percent this week. They could fall even lower this year if the Fed launches another round of bond purchases, as some economists expect.

Still, cheap mortgage rates have done little to boost the depressed housing market. For eight straight weeks at the end of 2011, the average fixed mortgage rates hovered around 4 percent. Yet many Americans either can’t take advantage of the rates or have already done so.

High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.”

– The Associated Press

Lowe's Offers New Service for Homeowners

Owen and I like to provide helpful information to our clients and friends. I just read about a service for homeowners provided by Lowe’s - and it's absolutely free. We have been members of Lowe’s Realtor services for years and have enjoyed the benefits for both our clients and us as Realtors. Now Lowe's has created a service that is geared directly toward homeowners.  Registration is easy (I just registered) and I think can be a benefit. By going to the website mylowes.com and creating a MyLowe's account (click on the MyLowe's button at the top left of the web page), you can organize and keep up with all your home improvements/renovations. This is a great way to keep up with renovation expenses. There are many other benefits too, but one that grabbed my attention is accomplished by creating and managing a home profile. Homeowners can create a virtual version of their home, adding and collecting important info, such as home specs, room dimensions or project information, all organized by room or broken down by project. Not only can the account serve as a quick reference for specs and sizes, but it can also be a go-to source for manuals and warranty information for all of your products and appliances. I can see this being a very useful tool when you want to sell your home. Just think, all the information you need about improvements you’ve made down to the paint color on the walls organized and stored in one place! Plus if you have a MyLowe's card, you can link it to your online MyLowe's account to keep track of all purchases made online and in Lowe’s stores. When you log into your online MyLowe’s account, you will see an entire history of your Lowe’s purchases. Read the entire article at My Lowe's Benefits - Future of Home Improvements to find more about it and let me know what you think.