Be honest when applying for a mortgage

Another great Chicago Tribune article today on the cover of the Money & Real Estate section.  It talks about what lenders are checking when they have borrowers looking to apply for a mortgage.  There’s a lot of information in here that an average person wouldn’t know.  In fact, I learned quite a few things from this article, and I wanted to share them with my readers.

When you go to apply for a mortgage, you know that your lender will want to check your credit score or FICO score.  If you have a low score with a ton of debt, it’s very common these days to not get approved for a loan or to be quoted a high interest rate.  But did you know that lenders will now go back and check your credit score a second time?  They’ll want to do it prior to closing to make sure that you haven’t made an extravagant purchase, such as a car or a boat.  If you’ve done something like that, odds are you’ll have a hard time making a house purchase.  So if you are applying for a mortgage, make sure to hold off on paying for a house full of furniture on credit until after closing.  Don’t make any other large purchase while you’re in the loan approval process.  It can easily prevent you from getting approved.

I also found out that your online shopping can have quite an effect.  Lenders are now able to access data reservoirs that store information about your online shopping habits.  The firs thing they want to find out is that you live where you say you live.  For instance, if you’re living in your parents’ basement but you say you are renting an expensive apartment currently, they can now find out that’s not the case.  That helps determine what type of risk you are for borrowing money.

The lenders also might choose to find out what kind of online shopping you’re doing.  Do you say you’re not making very much money but somehow are able to afford designer clothing and accessories?  The lenders will know that something isn’t right and it could affect the type of loan you receive or whether you’re eligible for one at all.  They want to know what type of disposable income you have.

It’s very important that you remain honest during this process.  You don’t want to flub the truth.  You’ll be asked to provide bank statements and recent tax returns.  But don’t exaggerate on your income!  The lenders can now go to your bank directly to verify what they have received is accurate.  They’re also looking at your tax returns and talking to the IRS to make sure that your income is correct.  And don’t doubt that they contact a current employer to verify what you say you make. 

Your Social Security number will be run through an electronic database known as the Mortgage Electronic Registration Systems (MERS).  They’ll want to verify that you don’t have another mortgage you haven’t mentioned, since this database tracks more than 63 million mortgages around the country.  And it’s all legal to verify this information and check into your online shopping habits as long as it doesn’t discriminate based on race, age, religion, or other protected classes.  So it’s just a reminder to be extremely truthful during the mortgage application process.

Do you need the name of a good lender?  Are you looking to buy a home?  Please visit me online.

What’s most important in selling your home

I read a great article this morning in the Chicago Tribune. It talked about why sellers might be upset that the home they’re selling isn’t going under contract and why their neighbor’s home might be.  It listed some good points as to what will help get buyers through the door to get a sale.  Given the current housing market, homes aren’t selling as quick as they used to.  Market times are up, but given the right conditions, these tips will hopefully get your home to sell faster.  I want to go over a few of them.

1. Price.  This is the absolute most important reason why a home is not selling.  If you’ve had 30 buyers through the door and don’t have an offer yet, this is a good reason as to why not.  It’s probably overpriced.  This is not the right economy to “test the water” and list higher than market value for your home.  It will just lead to your home sitting on the market for longer and becoming stale for buyers.  If you need to sell quickly due to a divorce or relocation, for example, you will need to price your home below market value.  Make sure you discuss comparative properties with your Realtor as to what a good price should be.

The article also made a good point that you shouldn’t list your home for $299,900, thinking it will look better than $300,000.  You’re missing out on all the buyers who are looking for homes from 300-350 or 300-400K.  If you have a buyer looking from 250-300, your house will get noticed on both lists.

2) Curb appeal.  I cannot stress enough how important this is.  There’s a home in my friend’s neighborhood that just went on the market.  It looks like a jungle in the front yard where it’s impossible to find the front door.  It doesn’t take much time or money to trip the trees, rip out the weeds, and mow the lawn.  If I were a buyer looking for that home and I drove up for the first time, I wouldn’t even bother going inside.  So make sure your lawn is mowed, you have easy accessibility from the street or driveway to the front door, and even plant a few flowers with bold colors to make the front pop. 

3) Clear the clutter.  I’ve mentioned before how I’ve shown homes with dirty dishes in the sink, dirty laundry on the floor, and so much clutter in one room that you can’t even walk through it.  If you’re selling your home, now is the time to cut back.  Put some belongings in storage.  Clean out half your closet.  Make sure to remove family photos from the walls.  And do the simple things: put your dishes away, set the table, take your lotion and contact solution off your vanity and put it in a cabinet or drawer.  The less stuff of yours showing up, the better.

4) Internet marketing.  Make sure your home is being shown in the places where the buyers are looking.  It might be important for you to make sure your open house is showing up in the newspaper and there’s a big photo of your home there, too.  This is not where the buyers are looking anymore.  You want to make sure your Realtor is advertising on the proper sites: Zillow, Craigslist, Realtor.com, etc.  Ask any agent before you hire them what they do in terms of advertising and how many buyers will see it.  Find out how quickly the sign gets placed in the front yard.

These tips will help you sell a lot quicker.  If you have questions about if your home is ready for the market, please visit me online.

How the foreclosure process works

A new report from the U.S. Treasury Department shows that Chicago ranks 3rd, behind Los Angeles and New York, of cities whose homeowners needed assistance from the Obama administration’s mortgage assistance program.  These are people who are going through loan modifications to be able to stay in their homes.

While that’s good news for those struggling to make payments, it just proves the amount of people who are still losing their homes to foreclosure on a daily basis.  I thought I’d give a quick overview on the 6 phases of a foreclosure, for those of you who know somebody going through it or might be going through it yourself.  This will give you a full understanding of how the process works.

1. Missing a payment.  This happens after the first missed mortgage payment.  Your lender will usually send a letter or statement indicating that they have not received the payment.  After two payments are missed, you will likely receive a demand letter.  At this point there’s still a good chance the lender will work with you on catching up with payments.

2. Notice of default.  After 3 months without a payment, the loan is transferred to the foreclosure department.  The notice will be recorded that money is owed and you’ll typically receive another 3 months to catch up and to make the payments.  This is known as the reinstatement period.

3. Notice of trustee’s sale.  So now it’s been 180 days, or 6 months, since the first payment was missed.  This gives you an idea of how long the foreclosure process takes from beginning to end.  At this point they’ll advertise the trustee’s sale in the county the home is located in.  You’ll see this notices in your local newspaper that includes the owner’s names, property address, and sale information.  The lender has to publish this information for three weeks prior to the sale date.

4. Trustee’s sale.  This is the actual sale.  The property is sold to the highest bidder who meets all the requirements.  The lender will determine what is a fair opening bid.  If sold at this sale, the home now belongs to that purchaser who can immediately take possession and evict the previous homeowners.

5. Real estate owned.  If the home was not sold at auction, the lender now owns the home.  They’ll most likely put it up for sale with a Realtor.  Most of the time, the current owners are already gone from the home.  Sometimes these homes will be in very poor shape, left that way by the previous owners.  Other times the bank will have paid money to make changes to make the home more attractive to new buyers.  If you’re looking to purchase a home and your Realtor tells you it’s an REO or real estate owned, you will now know what that means.

6. Eviction.  You can usually remain in the home until it’s either sold through the trustee’s sale or as an REO.  Once it’s been sold, the sheriff will come to evict anyone still in the house.  They can remove people and their belongings that are left in the home.  If you’ve left the home on your own and there are belongings still there, once the home is sold, those belongings will most likely get thrown out.  So be aware of that.

If you know that you are going to have trouble making payments, do your best to speak to the lender beforehand to try to work out an arrangement.  It’s worth talking about a temporary or permanent relocation.  There are even companies nowadays that can help speak to the lender on your behalf.  More information can be found in this MSN article. If you have any more questions, please leave me a comment or visit me online.

Your best local fireworks displays

Since this blog was so popular last year, I figured I’d return to it over the holiday weekend to let you know where you can catch some of the best local fireworks displays in the Chicagoland area.  I hope you’ll all be able to get out to view some of these fantastic shows. 

Evanston: July 4th at 9:15 pm at Clark Street Beach (Clark Street and the lakefront).  Palatine Concert Band will be playing from 7:30 to 9:10 pm at Dawes Park.  View Evanston’s site for more info. I have to say, even though I do work in the Evanston area and am probably a little biased, that this show is absolutely fantastic year after year!

Glenview: July 5th (it’s Monday!!) starting at 7:30 pm at the Glenview Park Golf Club at 800 Shermer Road.  View the park district site here.

Skokie: Skokie is planning a 3-D fireworks display and the first 10,000 visitors get a free pair of 3-D glasses.  The show is at dusk on July 4th at Niles West High School, 5701 Oakton Street.  Their rain date for the show is July 5th.

Wilmette: Aside from Chicago’s fireworks tonight at the Taste of Chicago, Wilmette is also planning their fireworks display tonight, July 3rd.  The show is at Gillson Park at Lake Avenue and Lake Michigan and starts at 9:30.  Starting at 4 pm today, Wilmette is having a Tastefest and carnival rides for the kids.  View their Web site for more information.

Buffalo Grove: You’ll be able to view their fireworks from four locations starting at 9:15 pm July 4th.  You can see them at the Buffalo Grove Golf Course, Lake Cook Road & Raupp Boulevard, Rotary Village Green, or Willow Stream Park.  Starting at 7 pm, the Buffalo Grove Symphonic Band will be playing a concert at the Rotary Village Green.  More details here.

Libertyville: Fireworks begin at dusk on July 4th at Butler Lake Park, located on Lake Street west of Milwaukee Avenue.  In the Butler Lake Band shell, the Libertyville Village Band will play a concert at 7:30 pm.  View their site.

I hope you all have a safe and happy holiday weekend. Visit me online if you need anything!