Brooklyn Real Estate Q&A and Info

The mortgage meltdown that we are experiencing at this time makes it all the more important for anyone thinking about purchasing a home to make sure he or she does everything possible to improve his or her credit score.  Here are seven things that you can do to increase your FICO score.

1. Pay Off As Much Debt As You Can - This is the best and quickest way to improve your credit score.
2. Pay Your Bills On Time - It may sound like a simple thing, but few things will adversely effect your credit score like having late payments.
3. If You Are Behind On Payments, Catch Up - Do everything you can to get current on all payments to your creditors and stay current.  The longer you keep paying your bills on time, the better your score will be.
4. Having Trouble Paying Bills?  Get Help - If you find that you just can’t keep up with all your bills, contact your creditors and see if you can make arrangements or contact a credit counselor.
5. Do Not Open Any New Credit Accounts - Having the ability to borrow money doesn’t effect your score, but owing a lot does.  Don’t tempt yourself.  Open new accounts only when absolutely necessary.
6. Do Not Close Old, Paid Off Accounts - Closing those accounts lowers the total credit available to you and makes the balances you do have loom larger in credit score calculations.   Also closing older accounts can shorten the length of your reported credit history and make you seem less credit-worthy.
7. Keep Track of Your Credit Score - You are allowed to get a free look at your credit report with all three credit bureaus (Experian, Equifax and TransUnion) once a year.  Any one of the three credit bureaus will calculate your FICO score for a nominal fee.  Should you find any errors, follow the credit bureau’s instructions on how to get the problem corrected as soon as possible.

These seven tips can help you increase your FICO score (remember 850 is the best and 300 is the worse), and improve your chances of getting a loan with the lowest possible interest rate.   Happy House Hunting!

If you want to send potential buyers running for the hills, having offensive odors meet them at the door is a great way to do it.

I recently had an open house at a home that always smelled fine on all the other occasions that I visited it, but this particular Sunday afternoon, the house smelled like pee.  As tactfully as I could, I asked the homeowner about the “slight urine smell”.  She quickly answered that her youngest son often peed the bed, and she just didn’t have time to do laundry that weekend.  Sure enough, as I went toward her son’s bedroom, my eyes began to water.  Air freshener didn’t help, and removing the offending linen seemed to be too little too late.

Needless to say, the home was not sold that day.  First impressions in real estate sales is almost everything (pricing is more important, but that’s another blog entry), so when you’re planning to sell your home, give it a good sniff in every room (don’t forget the basement).  If you can detect any bad odors such as mold, cat or dog smells, cigarette or cigar smoke, or strong food odors like garlic, then its time to take measures to correct the problem.

Often times, a good scrubbing is all your home needs.   Soft surfaces hold odors so cleaning carpets, curtains, bed linens and other fabrics will often solve pet and food odor problems.   Cleaning (or removing) ashtrays, mopping floors and wiping down walls, in addition to cleaning all soft surfaces, will often eliminate or reduce the stale cigarette smell left behind by smoking.  However some odors require the replacement of old carpets or the priming and painting of walls to remove them.

If you want to get the best possible price for your home, preparation before every showing is essential, and part of that preparation is to eliminate any bad smells.

“What exactly is a short sale?” you ask.  A short sale is when a lender willingly forgives part of a debt owed on a house.  Or in other words, the bank is shorted some of the money they are owed.

For example, a home owner is over 90 days late on their mortgage payments with no hope of catching up.  Eventually they will be foreclosed on.  Their total mortgage amount and arrears is $500,000.  The bank agrees to let a buyer purchase the property for $475,000 causing the bank to lose $25,000.

There are many banks and other lending institutions out there, and each has its own short sale procedure and requirements. The one thing they all have in common is that the short sale processes takes a very long time.

Why would a bank agree to this?  If the bank concludes that foreclosing on the property, maintaining it while they try to sell it, and dealing with the cost of selling it (transfer taxes, Realtor fees and so on) is going to cost more money then the amount they are being asked to forgive, the bank may choose to cut its loses and agree to a short sale.

Buying a short sale property is not an easy task.  Here is a great article from the New York Daily News Website that explains the process in detail.

Are short sales available in Brooklyn?  Yes they are.  To find out more click here or give me a call at 917-544-2662.

When you’re pre-qualified for a loan, it means that, assuming all the information you provided about your finances such as your employment history, salary, the amount of money you have for a down payment and so forth is accurate, you have the potential of getting a loan for the amount stated on your prequalification letter. Generally, banks and other lending institutions will pre-qualify you for a loan for free.

When you’re pre-approved for a loan, it means that your employment history, your salary, the amount of money you have for a down payment, your credit score and all other pertinent financial information has been verified. You are approvedfor a loan for the amount that your pre-approval letter states. Generally, banks and other lending institutions charge a fee of several hundred dollars for pre-approving you for a loan.  Usually, the pre-approval fee can be applied towards your closing costs.

If you are truly ready to buy within the next 90 days, getting pre-approved for a loan will save you time, and will give you a leg up if you find yourself in a bidding situation with another buyer who is not pre-approved. Also, many sellers require that you are pre-approved before they will allow you to view their property, ensuring that a potential buyers inability to qualify for a loan will not jeopardize a possible sale.

A reverse mortgage is a loan against real estate that requires no repayment as long as you live in the property.

In a forward mortgage, which is what a traditional mortgage is called, you repay the loan that causes your debt to decrease while the equity (the amount your property is worth minus anything you owe) increases. In a reverse mortgage the exact opposite happens. Equity is removed from your property either in one lump sum or through monthly payments, which increases your debt. The debt is paid off when the property is sold.

There are two types of reverse mortgages. One is backed by HUD, and the other by Fannie Mae. To find out more information about each, go to HUD’s and Fannie Mae’s websites.