Is it enough to really encourage the banks to be more cooperative in a short sale environment?  Probably not.  Will it encourage more homeowners to attempt to short sell their house versus a foreclosure – maybe. 

In a Carlsbad short sale, the homeowner normally can not afford to keep making the payments.  Maybe they have contacted the lender and asked for a modification and the lender couldn’t help them.   So, rather than walking away from the property and letting it go to foreclosure, they attempt to sell the property for less than is owed on it.  They normally live in the property (payment free) until the sale is completed.

This is beneficial to the lenders because vacant foreclosures are often ransacked – by angry property owners, or vandals, bringing down the price of the home even further.  It is beneficial to the homeowner because it reports more positively on their credit report. 

For More Information on Carlsbad Short Sales vs. Carlsbad Foreclosures…

The second part of the list would be things you don’t necessarily need but want – a garage, an updated kitchen, or an extra room for an office. By setting the expectation that there probably is no such thing as the perfect house, you will recognize that house that gives you everything you need, and most of what you want, all within your budget.

If you have any questions, please contact The Mewborn Team.  We are always happy to help you refine your criteria or steer you in the right direction.

Use professional help

But your home purchase is so much more than getting online and finding your home.   Your agent has access to what is currently for sale, as well as what is currently under contract or recently sold.  Your agent will be able to take this information and schedule time to see the properties, determine pricing, and negotiate on your behalf.

Your home purchase will be one of the biggest investments you will ever make.  Your agent is someone who knows the contract, has experience negotiating, and will walk you through the entire process to ensure that your transaction closes, and you get the house you want!

Know how much you can afford
If the housing crisis proved anything, it’s that just because a lender says you can afford something, it doesn’t necessarily mean you can.  No one can be responsible for your finances but you. To avoid this mistake, create a budget, and try to stick to it.  A good rule of thumb is to devote no more than a third of your monthly household income to housing costs (which include mortgage principal, interest, taxes, and insurance).

In addition to your monthly budget, be sure to keep in mind that there are closing costs, appraisal fees, homeowner’s insurance, utilities, and repairs, and maintenance.  Keep in mind these expenses before you commit to more than you can afford.

Getting Preapproved
After you’ve cleaned up your credit as much as possible, it’s time to contact a lender and determine how much you can afford. You will have to provide your credit report, your W-2’s pay stubs, and bank, and investment statements. By getting preapproved, you will save yourself the time and disappointment by looking at homes you know you can afford, rather than getting your heart set on that “perfect” home that is our of your price range. Also, it will put you in a better position to negotiate when you find that right home.

If you have any questions, please contact us. We are always happy to answer your questions or point you to a professional who may be able to help you in your individual situation.

This week will be a series of five things you can do to be prepared to buy your first home.

Check your credit report and score
You’ve spent hours online looking for the perfect house.  You’re ready to get out and walk through an open house.  But before you set aside time to start touring homes, get your credit report – a full one that includes your score.  You can access your credit report once every 12 months at www.annualcreditreport.com.  But even if you have to pay for a credit report, that $10 could save you thousands of dollars over the course of your mortgage.  In 2010, you need a credit score of over 700 to qualify for the best mortgage rates.  By reviewing your credit report a few months ahead of time, you can correct any mistakes, increase your score, and reduce your mortgage payments!

The Standard & Poor’s/Case-Shiller home price index released Tuesday inched up 0.2 percent to a seasonally adjusted reading of 145.49. The index was off 5.3 percent from November last year, nearly matching analyst’s estimates that it would fall by 5.1 percent.

See More…

But in addition to some of the existing projects, there is a new development starting in northern Carlsbad called The Foothills.  DR Horton, William Lyon Homes, and Brookfield Homes are partnering up to build 404 new homes at the intersection of El Camino Real and Cannon Road in Carlsbad, CA. 

William Lyon will be building 110 single family homes.  Brookfield will be building 210 single family homes.  And DR Horton will be building 84 detached condominiums.  A grand opening is anticipated to be some time in the spring of 2010.  The homes will range in size from 1,778 to 3,287 square feet, with prices expected to start in the $500,000s. 

The neighborhood will also include a 2.67 acre recreation center that includes a picnic area, tennis courts, a swimming pool, children’s pool, and various parks and trails.   

If you have any questions about this neighborhood or any other Carlsbad real estate, please contact The Mewborn Team.  We specialize in Carlsbad and Coastal North County San Diego real estate.

The Mewborn Team just listed one of our neighbors’ homes this week. The La Costa Oaks home at 3534 Camino Cereza has too many amenities to list, but here are a few great features:

• 4 Bedroom, 4 Bath – 3534 square feet, with a bonus room
• 3 car garage
• Custom tile flooring
• Maple cabinets and upgraded Bosch and Thermador stainless appliances
• Dual air conditioning
• Upscale clubhouse with fitness center and Olympic pool
• Award winning San Dieguito School District
• Professional landscaping with flagstone walkways and stone walls

3534 Camino Cereza is listed at $799,000. Please contact The Mewborn Team to schedule a time to tour the home. You couldn’t pick a better place to build a life or raise a family!

Down 10 to 30 pts. 

Down 25 to 45 pts. 

Down 60 to 80 pts.

Down 90 to 110 pts. 

Down 45 to 65 pts. 

Down 105 to 125 pts. 

Down 85 to 105 pts.

Down 140 to 160 pts. 

Down 130 to 150 pts.

Down 220 to 240 pts. 

Carlsbad, CA - You may know your credit score – but do you have any idea how it is calculated?  In a formula that is so secretive that they could tell you – but then they’d have to kill you, we never know how our actions will affect that score. 

How will your credit score change if you close a credit card?  Should you go through the hassle of a short sale, or just allow your house to go into foreclosure?  What if things are tight, and you go over your credit card limit?

Your credit score is a three digit number normally between 300 and 850.  It is the number used to determine the risk of giving you a loan.Scores over about 715 are considered good scores, and typically will get you the best interest rates.  Scores over 600 and under 715 are moderate scores. 

And although you may get a loan, you may pay a premium interest rate to get it.  Scores under 600 are typically considered to be a high risk borrower.  These borrowers either may not get a loan, or may pay much higher interest rates on their loan.

Although the formula is still a mystery, Fico.com has at least provided a table showing some of the most common penalties to your credit score.

FICO’s information shows that bankruptcy does the most serious damage to a credit score (up to 240 points), followed by foreclosure (up to 160 points) while maxing out a credit card has the least numerical impact (as few as 10 points).

Those with good or excellent credit — so-called prime borrowers — put more points at risk with each mistake. For example, someone with an average credit score of 680 who pays a bill 30 days late will see a drop of 60 to 80 points. But for someone with an excellent credit score — 780 — that same delinquency can cost 90 to 100 points.

If considering whether or not to try to sell your house through a short sale vs. allowing a full foreclosure, please keep in mind that settling a debt (short sale) with a lender can save you 50 to 100 points (and the ability to get another loan in the future) or MORE!  If you have any questions about how this might impact you personally, or how to market your property for a short sale, please contact The Mewborn Team.  We are happy to sit down with you for a no obligation consultation about your best options.