| Hundreds of thousands if not millions of current | | | | accountant and mortgage professional together to |
| homeowners are having to face this unfortunate | | | | analyze your options. Your goal is to have just |
| fact in the current depressed housing market. It is | | | | enough documentable income to qualify for a |
| mostly a result of either a "no money down" | | | | conforming mortgage, which will have a lower |
| home purchase or tapping that 'ever-growing' | | | | interest rate throughout the life of the loan.c. |
| equity with some form of 100% home financing. | | | | Another thing you could do is pay off some debt |
| Worse yet are homeowners where there is an | | | | or sell a car to get rid of a car payment. If you |
| ominous ARM adjustment in the next year or | | | | have to replace it, buy a much cheaper car or let |
| two. The homeowner had planned to refi or sell | | | | a non-borrowing spouse finance it so it doesn't hit |
| before mortgage interest rates adjust higher but | | | | your DTI. |
| can't in the current market. | | | | 2. Home related actions:a. Get a new more |
| For homeowners that have a fixed rate, it's just | | | | current appraisal. The appraiser that did your |
| a matter of holding on until home values go up. In | | | | previous appraisal may give you a price break. |
| many, if not most homes this has historically been | | | | Pay close attention to negative adjustments |
| the case. If you stay in one house long enough | | | | between your home and the comparables. They |
| the value will eventually go back up. Unfortunately, | | | | should give you a starting point on what |
| in very localized areas where the economy has | | | | improvements you should make. Yes you may |
| gone down the toilet homeowners are getting a | | | | have to put more money in your home to |
| double whammy. | | | | significantly increase the value but you will do it on |
| So what can a homeowner do? There actually | | | | the absolute cheap (cheap price not cheap quality). |
| are a number of things that can be done. We will | | | | Don't hesitate to pick up the phone and ask your |
| cover them in two parts. Part 1 is related to | | | | appraiser what should be done. A good example |
| related to financing and Part 2 involves the home | | | | would be to finish a basement or eliminate some |
| itself. | | | | condition items noted by the appraiser.b. The |
| 1. Financing related actions:a. For those that | | | | single most important item most homeowners |
| acquired a sub-prime mortgage due to credit | | | | overlook is STREET APPEAL! At resale, it's |
| problems, begin a full court press on improving | | | | everything. Cute houses resell better and faster in |
| your credit scores. This is a very broad subject | | | | ALL markets. It can often get you an offer |
| to cover here but the key is you must start | | | | above the asking price.c. The homeowner should |
| TODAY! There are a number of services and | | | | do most of the work. If you use contractors, |
| books out there that can help. If you are not sure | | | | only use them for critical building code items like |
| where to turn, go to our website in the upper | | | | electrical, structural and some plumbing, otherwise |
| part of the home page above my toll free | | | | you could make your situation worse.d. Consult a |
| number and click on the link for Guaranteed help.b. | | | | realtor very familiar with your area about what |
| If you had to get a stated income or No Doc | | | | buyers want and don't over improve for your |
| sub-prime or "Alt A" mortgage due to income | | | | neighborhood and if you need or want to sell, |
| that is difficult to document, you need to talk with | | | | clean and depersonalize your structure. No clutter |
| your CPA or accountant. If you are using | | | | and empty looking closets, personal stuff and |
| aggressive tax tactics to shelter some income | | | | excessive furniture put away in storage, no wild |
| you may need to need reconsider, especially if | | | | colored paint or special paint treatment and |
| the benefit was a one-time tax reduction. | | | | nothing in disrepair! |
| Remember, you are paying a higher interest rate | | | | There you have it. So stop being depressed and |
| for these type loans for as much as 40 years. | | | | start taking action. A planned set of actions can |
| You could even file an amended tax return for | | | | cure the worst of anxieties. Good Luck! |
| the prior year or two. Work with both your | | | | |