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Charleston Real Estate Law Blog

Your credit rating doesn't tell the whole story

You aren't a bad person, and sometimes, events in your life can make it hard to make payments on time. You don't want to lose your house, but if a foreclosure is looming, you may be worried that you have no other choice. Fortunately, there are some options out there, but if you do go through a foreclosure, that doesn't mean there is no hope for your financial future.

Foreclosures can impact your credit rating significantly. Lenders typically view a foreclosure very negatively, which means it can be difficult to get a new home loan or other kind of financing. Each lender is different, and some may still approve you, but your interest rate may be high. A foreclosure on your record typically makes it hard to obtain good rates for credit, but a single foreclosure isn't necessarily enough to destroy your credit rating.

What are some quick facts about short sales sellers should know?

Short sales help sellers who owe too much on their homes that are now not worth what their mortgages cost. By selling a home through the short-sale process, these individuals have the opportunity to get out from under the burden of a mortgage while being relieved of the additional debts they could have owed beyond the sale price.

Here's an example. If a home is worth $75,000 on the market in 2016 but was purchased for $125,000 on the market in 2015, then the home has dropped significantly in value. The mortgage is now around twice the cost of the home, a burden for the home buyer who may never earn back the money they are putting into the home.

A short sale will affect your credit: Here's how

It's a fact that a short sale will affect your credit, but it may not be as bad as a foreclosure or bankruptcy, which is something to consider. A short sale allows you to get out of debt by eliminating your mortgage, but since you do get a break on how much you pay back, it may still impact your credit fairly severely.

The impact of a short sale on your credit may not be as severe as you expect, though. For instance, a FICO study showed that a short sale could drop a 780 credit score to as low as 620, or approximately 160 points. The amount your score drops could vary, but it will be impacted in some way.

Foreclosures up in October compared to prior month

Dealing with the risk of foreclosure can be hard on a family, but there are ways to address your concerns. You may be able to take steps to catch up on your mortgage payments, or a bankruptcy could give you time to stop a foreclosure and save your home. No matter what you choose to do, knowing the rate of foreclosure activities in the United States can be helpful, since it indicates the kind of economy you're living in.

In October, there was a sudden spike in the number of foreclosures in the United States. It's slightly worrying, as it could be a sign of trouble. According to the news from Nov. 10, the number of properties with bank repossessions, scheduled auctions and default notices jumped up 27 percent in October compared to September. Volume wise, the number of foreclosures are still down by around 8 percent, but it does signify that trouble could be brewing.

The 4 factors that affect real estate decisions

When you want to buy or sell real estate, you have to understand the market. There are four factors that drive the real estate market. The first factor is demographics. This takes into account things such as age, gender, income and population growth in an area. Demographics affect real estate by determining how much real estate can be priced for and which kinds of properties are in demand. For example, an area with many students may be best off with cheaper apartments, while a high-income area might have expensive, single-family homes.

Another factor that affects the real estate market is the interest rate of mortgages. If an interest rate is too high, it can influence people significantly, because they may wait to make a purchase. The lower an interest rate is, the more likely it is that a person will make a purchase, since the cost of the home will be less over time.

Can foreclosure be positive for a homeowner?

Can foreclosure be a good idea for you? Does it always have to be something that is looked on so negatively? The truth is that foreclosure can get you out of debt, but it will hurt your credit score. You aren't alone; there are thousands of people who go through foreclosure every year largely because of the housing bubble burst, which left homeowners with mortgages that cost more to pay off than their homes were worth.

It may come as no surprise that incomes in the United States have dropped as well. Many people have taken pay cuts or lost their jobs. That has made mortgage payments harder to meet, and many homeowners have had to decide if they want to pay their mortgages or other bills when they simply don't earn enough to pay everything.

Foreclosures versus short sales: The benefit of a short sale

There are several reasons that you should choose a short sale over a foreclosure. Whether or not you're in a foreclosure, if selling your home's not going to pay enough to cover your mortgage, you might want to think about a short sale instead. Short sales have some benefits over foreclosures, like not having the foreclosure on your credit report, having no mortgage payments to make in the future and not having to cover any of the remaining mortgage after the sale is approved in most cases. If your credit report doesn't reflect the 60-plus day late payment, then you should be able to buy another house immediately.

With a foreclosure, you lose the right to home ownership and may have to return to being a renter. A notice of public sale will be posted on your front door in many cases, alerting those around you that you are in a foreclosure. Your credit will be badly affected, and the foreclosure could stay on your credit report for up to 10 years. You won't be eligible to buy another home for seven years under Fannie Mae guidelines.

South Carolina foreclosures at pre-recession rates

Foreclosure can be a threat to your home or a welcome relief in releasing debt. What has been shown is that a better economy supports better wages, and that leads to fewer foreclosures. Since the recession has passed, foreclosure rates are dropping.

According to an Oct. 17 news report, South Carolina had fewer foreclosures in September 2016 than it did a year prior. While there were 2,060 properties in foreclosure as of September, a 1.83 percent rise since August, this is still a significant drop from 2015. In September 2015, there were nearly 14 percent more foreclosure filings.

What is a contingency?

Before you purchase a home, there are a number of contingencies to consider. When you're considering a purchase, you can have these contingencies written into your purchase agreement or may find the seller had them included. For instance, one contingency may state a particular amount of time that must pass between you signing the contract and the closing of the deal. With that period, you'll have time to satisfy any other contingencies the seller makes, and the seller has time to satisfy any conditions you've requested. If the contingencies aren't met, the sale can be canceled.

One common contingency is having a buyer's inspection on the home. Or, you may want to have your own appraisal of the property. Other contingencies include things like asking for the sale to go through only once your home sells or the seller finds a new home, which can take more time. It's up to you to decide if you want to accept the seller's contingencies and the same is true for the seller.

Foreclosures down in South Carolina in August

When you're living in an area, you can tell how the local economy is doing by the number of foreclosures taking place. Good news for South Carolina is that the state is improving. That doesn't mean foreclosures don't happen, and those who struggle should consider bankruptcy options or having debt relief discussions with their attorneys.

Foreclosure filings in South Carolina have dropped by 18.6 percent since August 2015, a shocking improvement to an area once riddled with foreclosures. According to The Charleston Regional Business Journal's Sept. 28 report, the 2,023 foreclosures filed in August was a significant drop from the same time last year, showing that the overall economy is still getting better from the recent recession.

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