Century 21 Crest Real Estate-North New Jersey Blog

How will a short sale effect my credit score?

2012-02-23T09:28:00.001-05:00

How will a short sale effect my credit score?

Reprinted from Massachusetts Short Sales

A common question that is asked of me, is how does a short sale effect my credit score?. Lets make no bones about it, a short sale will negatively effect your credit score. Plain and simple. No one can predict exactly how much a short sale will effect your credit score. There are many variables involved. While the impact may be less with a short sale it will mostly likely be as much as a foreclosure and it is irresponsible for any one to promise it will be less.

How Does a Short Sale Effect My Credit Score vs a Foreclosure?

Compared to a foreclosure a short sale can effect your credit score slightly less than a foreclosure to as much as a foreclosure. Again, no one can predict how your credit score will be impacted in either a foreclosure or a short sale. Here is a rough estimate put out by Fair Issaac as reported by CNN.

30 day mortgage late: 40 – 110 points

90 day mortgage late: 70 – 135 points

Foreclosure, short sale or deed-in-lieu: 85 – 160

Bankruptcy: 130 – 240

The one big difference in your credit profile between a Short Sale and a Foreclosure

The biggest difference between a foreclosure and a short sale, is not the “point hit to your credit score”, it is the actual foreclosure mark itself. The biggest area where it will effect you is in the ability to buy a home in the future.

In a short sale you will be able to buy again in as little as two years and in rare instances less.

In a foreclosure, it will be 5-7 years before you can purchase another home.

Other things to think about when it comes to Short Sales and your Credit Scores

The first thing to remember is if you are considering a short sale or going through a loan modification, most likely you have already missed mortgage payments. In my experience as a short sale agent, people who are struggling with their mortgage are usually having problems with other lines of credit. Your credit score has already been negatively impacted.

Secondly, a short sale is looked at as cooperation, a foreclosure is looked at as an adverse taking of the home. While your credit score may be impacted, creditors, such as landlords, may be willing to be more forgiving of a short sale.

Thirdly, with a short sale you do have a chance to lessen the blow of your credit score impact, lessen the deficiency balance and remove any chance of a deficiency judgement that you do not have in a foreclosure. While a short sale does not necessarily guarantee these things, at least you have the chance.

One last little pearl of wisdom I would like to impart.

I have been doing short sales for years and have worked with many home owners. Some home owners I have worked with for over a year and a half or more, before doing a short sale, as they pursue other options to foreclosure or they try to hang on because they are afraid of what will happen to their credit. Meanwhile, they miss more and more mortgage payments and their financial distress spills over into other financial areas of their life, creating even a bigger mess.

How a short sale impacts your credit score, should be pretty low on your list of whether you should do a short sale. Focus on how a short sale may impact the quality of your life and creating a fresh start. It is likely if you are considering a short sale, you NEED to do a short sale. Pull the band aid off fast now and get on with your life.

Your Ceiling Fan - Are you using it the right way for the Season?

2012-01-16T21:55:00.000-05:00

In colder months, do you use your ceiling fan the right way?

In the summer they can provide cooling breezes, but during winter they can also assist in circulating warm air through your home. The trick is understanding the switch on the fan which controls the direction of the fan blades:

During the SUMMER months, the standard setting of COUNTERCLOCKWISE provides cooling down drafts.

During the WINTER months, the reverse setting of CLOCKWISE creates an opposing updraft, which redistributes the warm air which rises to the top of the room.

By pulling cooler air up from the ground, the warm air is more efficiently distributed throughout the home.

You may have a wall switch with controls fan direction, but most ceiling fans have a simple toggle-switch which controls the direction of the fan’s motor.

We like to help homeowners get the most out of their investment in their dream home. If you’re thinking about a move soon, please get in touch! Call Century 21 Crest Real Estate - 973-686-1500 or email us at century21crestrealestate@gmail.com

Now is One of the Best Times in History to Purchase a Home.

2012-01-16T21:45:00.000-05:00

Now is perhaps one of the best times in history to purchase a home. Low interest rates and unparalleled affordability have created a perfect storm for qualified buyers.

So does that mean the “flipping days” are here again? Probably not. While there may be shrewd investors out there who have the ability to squeeze out a profit on flipping properties in this market, the margins aren’t favorable and re-selling is tough.

It is, however, an excellent time for buyers looking for a long-term home investment, especially those who want to manage a rental property. There’s a good margin between true value and current prices, for one. Additionally, there’s great potential for higher rental values as rental inventory decreases under the pressure of potential buyers who can’t yet qualify for a loan.

Do you have a college graduate or newlywed child? Another great investment is the purchase of a home for someone in the family that may occupy it as a tenant until such time they can afford their own home.

If you’re curious about which neighborhoods would make the purchase of an investment property a good move, feel free to contact our office today. We would be happy to help advise you on an investment purchase. Call today - 973-686-1500 or email at century21crestrealestate@gmail.com

Down Payment Gift Money

2012-01-07T14:52:00.001-05:00

Down Payment Gift a Leg Up to Home Ownership, But Know Tax Rules

We explain the tax details around giving the gift of a home down payment. Read

Visit houselogic.com for more articles like this.

Pequannock Township News - 2 Months After Irene-

2011-11-02T10:02:00.000-04:00

PEQUANNOCK TOWNSHIP NEWS- 2 MONTHS AFTER IRENE

Posted on October 29, 2011 by Pequannock Township Real Estate Agent - Colleen McMahon, REALTOR,

Century 21 Crest Real Estate.

Many of us sat in disbelief just 2 months ago hearing that the threatening rainfall from Hurricane Irene was going to push the rivers to the limits and flooding was predicted to be worst than the 1984 Flood. It’s been a tough 2 months after the major flooding to our small close-knit community of just 14,500+ residents that live inPequannock Township. We all know families, friends, co-workers, teammates etc…that were affected by the flood waters that ravaged through our area starting with heavy rainfall on August 28, 2011 and finally the river cresting at an all time high of 25.24 ft. An estimated 1,100 homes in Pequannock Township were affected by the storm with 900 homes with major damage.

The media hyped up that the Hurricane could have been a Cat 3, by the time it hit Virginia, Hurricane Irene was downgraded to a CAT 1 and was pounding her way to New Jersey, New York and the surrounding states. Finally belief, the Township did everything possible to alert the homeowners and business owners in the flood prone areas. Door to door went the Fire Inspectors, Building Dept., Fire Departments, Reverse 911, Electronic Signs, Channel 77 News, the Township website was updated continuously during the storm (www.peqtwp.org), and social network, Facebook (https://www.facebook.com/#!/groups/226332979096/) was a great source of information for all.

Yes, it turned out to be a Tropical Storm but in no way did Irene get out of Jersey without showing her true colors! Many of us just waited it out, watched the Hydrograph on the NOAA site (http://water.weather.gov/ahps2/hydrograph.php?wfo=phi&gage=pppn4&view=1,1,1,1,1,1,1,1&toggles=10,7,8,2,9,15,6&type=2) and couldn’t believe how quickly the water was coming.

That DAM many felt was the problem. They may be right but the amount of rainfall was just too much for any river, reservoir or stream to handle. I was actually watching the Town Council meeting from September and witnessed our own Township Attorney, Michael Hubner, who has lived in Pequannock Township most of his life said that he never speaks out in public with his personal opinions on such but he felt so strongly about how much he just LOVES this Town. He stated that he will do whatever he needs to do to help our Township. A large round of applause came from the audience.

Now it’s 2 months after the Hurricane Irene, the rebuilding of the flooded homes in our township have been slow going. Homeowners are trying to get their children and families back in the HOMES that they LOVE. It’s been very difficult. The whole process going thru the ripping out. the cleanup, applications, waiting on the adjusters, FEMA etc… it’s just overwhelming.

This recent disaster touched many, it brought our Township together even more. Town Employees, Council members, Local Churches, Organizations and Dedicated Volunteers worked shifts to care for families they never met before, they helped with preparing meals, laundry and so much more just proved what a “WONDERFUL TOWN WE LIVE IN”.

As for the 900 homes in Pequannock Township that were damaged, some are living with no floors, furnaces, walls etc…but it’s their HOME a place that they LOVE! They will rebuild and be happy again, time will heal but it will never forget what happened. Something has to happen, we can not continue to go thru this every spring or even during unusual storms like Hurricane Irene.

Pequannock Township is a STORM READY COMMUNITY but that doesn’t stop the river from rising, the DAM NEEDS TO BE ADDRESSED. The families affected need to know something is being done, not just talked about, debated about….they need to know that SOMETHING WILL BE DONE!

Many know that my office was flooded and I recall my boss saying while we were pulling out furniture, “I’ll have it done in 2 months” well, today is 2 months and YES, it’s DONE!!

For more information Understanding Flooding on the Pompton River
Release Date: March 30, 2011 visit http://peqtwp.org/Cit-e-Access/news/index.cfm?NID=21809&TID=60&jump2=0 for a power point demonstration. Courtesy of Township of Pequannock.

Refinancing hope for Underwater Homeowners

2011-10-26T09:46:00.000-04:00

Posted by Marie Episale, REALTOR, ePRO. Century 21 Crest Real Estate, Pompton Plains, N.J. --Mortgage Interest rates are great, right? Less than 4% rates are available for a 30 year fixed mortgages. You are excited and you want to refinance, Now!. You purchased your house in 2006 for $400,000 with a 6.5% interest rate and have $310,000 balance on your mortgage. You have used a handy on-line mortgage calculator and have determined that you will save $587 a month.

That $587 is already being mentally spent. A new computer, being able to afford a new car payment, buying clothes for yourself and your children. This savings will go a long way.

You call your Realtor for an opinion of your house market value. No, it can't be possible. Your house value is $300,000. Refinancing is not an option for you now - How can you borrow more than what your home is worth. Banks want equity, of course. Stuck. You are stuck.

President Obama to the rescue. On October 24th, 2011, President Obama introduced a "revamping" of an existing federal initiative called "the Home Affordable Refinance Program" (HAPA).

The new program enhancements address several other key aspects of HARP including:

 Eliminating certain risk-based fees for borrowers who refinance into shorter-term

mortgages and lowering fees for other borrowers;

 Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by

Fannie Mae and Freddie Mac;

 Waiving certain representations and warranties that lenders commit to in making loans

owned or guaranteed by Fannie Mae and Freddie Mac;

 Eliminating the need for a new property appraisal where there is a reliable AVM

(automated valuation model) estimate provided by the Enterprises; and

 Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the

Enterprises on or before May 31, 2009

An important element of these changes is the encouragement, through elimination of certain

risk-based fees, for borrowers to utilize HARP to refinance into shorter-term mortgages.

Borrowers who owe more on their house than the house is worth will be able to reduce the

balance owed much faster if they take advantage of today’s low interest rates by shortening the

term of their mortgage.

The Enterprises plan to issue guidance with operational details about the HARP changes to

mortgage lenders and servicers by November 15. Since industry participation in HARP is not

mandatory, implementation schedules will vary as individual lenders, mortgage insurers and

other market participants modify their processes.

We are holding our breath (do not try this at home) to see if these changes will, in fact, take place.

Buy Real Estate before the market goes up

2011-10-25T09:03:00.000-04:00

Should I buy now or wait?

Just about every day people ask me: “So how long is this down real estate market going to last? Where’s the recovery?”

They’re surprised when I tell them that in some markets, the recovery is already under way. Consumer attitude often lags behind local market data.

You see, there were lots of market indicators as far back as 2005 that the bust was on its way. Despite the fact that inventory on the market was increasing, prices floated up well into 2007. But there came a point when the “market data came home to roost.”

And when it did, well... no need to rehash bad news.

In some markets (especially those where buyers have recognized the incredible values and low interest rates) we see several indicators which suggest rebounding market health: Shrinking inventory, multiple offers, and fewer days on market. This is especially true if you look at non-distressed properties.

If those indicators are in play, you’re not in a buyer’s market any more. It’s becoming a seller’s market.

Obviously, tight-fisted lenders and buyers facing shaky job prospects exert their influence on the market. People are wary, and that psychological uncertainty is a part of the pervading sense that “things are bad.” But if you have access to capital and stable income, now is no time to be holding back. We’re unlikely to see these buying conditions again for a long time.

Oh, and by the way: Don’t forget the relatively low amount of new construction during this time paired with the pending population boom in the U.S. over the next 40 years.

Now is definitely the time to buy before the market moves up.

Is the recovery already underway in your neighborhood or neighborhoods you’re considering? Contact us to find out!

Century 21 Crest Real Estate - 973-686-1500

content courtesy of Eric Raymong - myrealhelper.com