Heather Cunningham\’s Blog

Many people think foreclosure is their only option when they default on their payments…there are many options other than foreclosure that should be considered first. I can help with those options. In this post I want people to know the difference in consequences when it comes to short sale or foreclosure.

- A homeowner who completes and short sale can be eligible for a Fannie Mae mortgage in about 2 years; if you lose your home to foreclosure you are ineligible for about 5 years on a primary residence

- Getting a future loan, starting with the application process, there is no question regarding a short sale at this time, however on a foreclosure you will have to check “yes” on the box that ask if you have had a foreclosure in the last 7 years.

- Regarding your credit score, on a short sale only your late payments will show and after sale is closed it is reported as “paid as agreed” or zero balance. That can lower your score as little as 50 points if you are not delinquent in any other areas and can pinch about 12-18 months. A foreclosure will lower your score typically about 300 points and remain squeezing about 3 years.

- A short sale is not reported on your credit history, it typically says “settled”, “paid” or shows a zero balance. A foreclosure will remain on your public record for 10 years or even more in some cases.

- If your job requires a security clearance, you should read the fine print of your contract with your employer. A short sale itself does not challenge most security clearance because as of now its not reported. A foreclosure on a person that has a security clearance is right up there with a conviction whether misd. or felony. In almost all cases your clearance can and will be revoked and job terminated.

- There are many jobs that are pulling credit history prior to employment and can challenge your future employment if you have been through foreclosure demonstrating a struggle, or inability to take care of business. Again, short sale isn’t reported and doesn’t show up on history.

- In some cases of short sales it is worked out to eliminate the option to pursue a deficiency judgement meaning you wont be responsible for the balance of the loan. 100% of foreclosures the bank has the right to pursue the judgement with exception to the 24 states that those judgements are not allowed.

Home Staging is very important when your home is on the market..it is what sets your home apart from the rest. The home that is clean, decluttered and properly set sends a warm feeling to buyers that walk in the door. Home staging is not all  about spending money and remodeling like you see on HGTV, but also just reorganizing and updating. Moving the furniture around is a great way to give your home a fresh look, adding accessories can make a HUGE difference. If you have things about your home that arent so great, highlight the great areas and make the not so great ones seem minor or even disappear. Whether your home is vacant or occupied, it needs to have warmth to it. Remember that your home is for your personal taste, but your home on the market is not your home anymore and be open to change, it is  only temporary. Have fun..selling and buying a home should be fun, dont be so stressed out that you forget to have fun!!

Renting out your home is an option when the selling is not going so well or not an option due to financial obligations and you need to move. In some cases…it works. I most cases..not so much. Here are some things you should consider before renting out your home.

- Rent is a great way to supplement your income; rent is not a dependable source of income

- Make sure you dont depend on the rent to cover the mortgage payment, you need another insurance or back up plan to cover the mortgage payment; Renters in general are renters for a reason and its usually because they are not so good with paying their bills and/or on time.

- Do your homework ahead of time and see what rental rates are in your neighborhood, calls signs, check craigslist, look at paper and make surethe rental amount covers your mortgage, taxes, insurance and repairs.

- Make sure you have an updated copy of the landlord tenent act book for your county. The rules are different in every county and the eviction process is different in every county. You need to know your rights and responsibilities and also the tenants rights and responsibilities, I guarantee your renters know what they can and cannot do and what you are required to do.

- Check your mortgage paperwork and make sure you are allowed to rent out your home, some have clauses that prevent you from using it as a rental property.

- Make sure you are updated on how you will be taxed.. You will have to show the rent received as income minus your expenses and also it will change your status from primary homewoner to investment which can  impend different tax brackets.

- You will need to change your insurance to cover the dwelling not the contents and make sure to let your renters know if anything happens to property that their contents will not be covered unless they get renters insurance, a lot of renters have no idea until a claim comes up that they have lost everything. You will need to keep mortgage company notified of insurance changes.

- Make sure you have a rental agreement that covers various topics that should arise such as late fees, repairs, where to send payments, include your city and state laws on mowing, extra vehicles, explain the course of action if failure to participate in each section and make sure you enforce them from the start….

- Keep in mind that it is your responsibility to make sure the home is paid for, maintained and out of trouble with the city (complaints and violations)

- You will need to consider repairs and establish a toolkit or team, keep in mind if you hire everything out the expenses will rise and profit will plument..make friends with your local Lowes, Home Depot and home improvement stores…your gonna need it!!

Welcome to Heather Cunningham’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Owasso.