David asks "My daughter has a roommate who stopped paying her half of the rent. The management company keeps calling me. I co-signed for my daughter. Now the management company is starting eviction. What should I do?"
If you want to avoid having an eviction for non-payment on your credit and your daughter's credit PAY THE RENT!Colorado landlords and management companies often have a "joint and several liability" cause. This means each and every person comprising "Tenant" are each, together and separately, responsible for all of the Tenant's obligations. A very common mistake made by tenants in a roommate situation is they think they are only responsible for their "share" of the rent. If the other roommates don't pay that is not their worry. This is wrong, wrong, wrong.
If a person signs a lease with other parties they are liable for not only the non-payment of rent by roommates but for damage caused by the roommates as well. Moreover, if you are a co-signing parent you are equally responsible.
Recently another friend asked about his daughter's liability on a lease. She and her boyfriend split. She stopped by the management office to notify them she was moving and even paid the rent one month in advance. The property manager smiled, took the money and wished her well but did not give her anything in writing acknowledging the change in the lease. Now the ex-boyfriend is not paying the rent, the management company is calling her and threatening eviction. "What can we do if 'Prince Charming" won't pay?" Dad asked. Basically, if the lease has a "joint and several liability" clause you either have an eviction on your credit or continue paying the rent until the occupying party gives notice and moves.
Its an exciting time for a young person to get a first apartment. The best help you can give is not by co-signing but helping your son or daughter read and understand the rights and obligations in the lease. Leases are legal documents and need to be understood completely before they are signed.
It is very advisable to have an attorney take a look at the lease before it is signed. It might save a lot of wear and tear on your stress, your bank account and your credit rating.
Tuesday, October 11, 2011
Friday, September 23, 2011
Common Home-buying Mistakes
Common Home-buying Mistakes
Q. What are the most common home-buying mistakes?
A. Not knowing how much house you can afford. Mortgage calculators are available online. Be sure to factor in such items as property taxes, maintenance and insurance. A conservative approach is best. Take a look at hard look at your current income, expenses, savings plan consider how the new house payment will impact your budget. Remember once you own your own home all the repair and maintenance are your responsibility so have a amount set aside or repair emergencies.
Not considering your needs, both immediate and for the next 5 to 10 years when considering, neighborhood location, square footage, number of bedrooms and bathroom, etc.
Not shopping for loan options. You need to know your credit score, get pre-qualified and pre-approved. Do not make the mistake of getting pre-qualified with more than one lender. Each time you get a new pre-approval your credit is check. Multiple inquires can lower your credit score making the best rate and terms out of your reach. Once you know your score simply tell the lender what it is and ask for a summary of loan options offered by his or her company.
Not including mortgage financing and professional inspection contingencies in the contract. The mortgage financing clause saves you if the home doesn’t appraise for the offered price; the inspection clause allows you to negotiate (or cancel the deal) if an inspector finds problems. A properly inspected home often includes a test for Radon gas ($125-$150) sewer line inspection ($120-$300) general home inspection ($250-$500) and with some properties tests for mold ($200-$400) and lead-based paint ($250-$350)
Falling in love with a house without considering all the facts, such as structural flaws, location, neighborhood and potential for resale. Remember as you are home shopping the last great house has not yet sold. Take your time and make sure to get good advice and the help of experienced professionals.
For more information on home buying or to receive a Home Buyer's Manual please contact me at Nell@Talk2Nell.com
Q. What are the most common home-buying mistakes?
A. Not knowing how much house you can afford. Mortgage calculators are available online. Be sure to factor in such items as property taxes, maintenance and insurance. A conservative approach is best. Take a look at hard look at your current income, expenses, savings plan consider how the new house payment will impact your budget. Remember once you own your own home all the repair and maintenance are your responsibility so have a amount set aside or repair emergencies.
Not considering your needs, both immediate and for the next 5 to 10 years when considering, neighborhood location, square footage, number of bedrooms and bathroom, etc.
Not shopping for loan options. You need to know your credit score, get pre-qualified and pre-approved. Do not make the mistake of getting pre-qualified with more than one lender. Each time you get a new pre-approval your credit is check. Multiple inquires can lower your credit score making the best rate and terms out of your reach. Once you know your score simply tell the lender what it is and ask for a summary of loan options offered by his or her company.
Not including mortgage financing and professional inspection contingencies in the contract. The mortgage financing clause saves you if the home doesn’t appraise for the offered price; the inspection clause allows you to negotiate (or cancel the deal) if an inspector finds problems. A properly inspected home often includes a test for Radon gas ($125-$150) sewer line inspection ($120-$300) general home inspection ($250-$500) and with some properties tests for mold ($200-$400) and lead-based paint ($250-$350)
Falling in love with a house without considering all the facts, such as structural flaws, location, neighborhood and potential for resale. Remember as you are home shopping the last great house has not yet sold. Take your time and make sure to get good advice and the help of experienced professionals.
For more information on home buying or to receive a Home Buyer's Manual please contact me at Nell@Talk2Nell.com
Thursday, January 6, 2011
I Love My Job!
Wow! Another new year ahead of me. Its always exciting to face the first business week in January and think about all the houses yet to be seen and the great homes yet to be found for friends, family, current clients and new clients.
2011 brings new challenges to home buyers and seller. As the old saying goes "For warned is for armed."
The magic words "your loan has been approved" are getting harder to hear. Home buyers are being asked to document and account for every penny, every financial action taken and get assurances from employers of continued job security. Home lending practices have drastically changed. Many programs home buyers relied upon have vanished.
According to RISMEDIA, August 2, 2010 article "Here are the top seven reasons banks are denying home loan requests:
1. Poor credit: The borrower may have a heavy down payment or excellent equity built-up in their house, but if their credit score is under a certain threshold, obtaining a new loan or refinance from a traditional bank is challenging. Even FHA (Federal Housing Administration) loans, which have traditionally catered to borrowers with lower FICO scores, have an average borrower credit score of 693, according to CNN Money, which is above the national average.
2. Insufficient liquidity: If the borrower does not have a heavy down payment (20%-30% for most banks) and strong excess liquidity, banks don’t want to take the risk on funding their loan.
3. Lack of income: The borrower does not have consistent proof of income for the last two to five years. Regardless of how good their credit score is or how much equity they have in their home, if they can’t show the bank proof of income, loan approval will be tough. This can be a big hurdle in the loan process, particularly for retired borrowers.
4. Lying on the application: Banks have learned their lesson and are no longer putting up with borrowers stretching the truth on their applications.
5. Debt: Borrower has excessive debt and their debt-to-income ratio exceeds the bank’s guidelines.
6. Unemployment: Most lenders will like to see at least two years of stable work to issue loan approval.
7. Self employment: Lenders are looking at self-employed applicants with a lot more scrutiny these days, making it very tough for these borrowers to get approved."
If buying a home of your own is part of your 2011 plan start with a phone call to an experienced loan originator. Here is where "buy local" can really pay off. A mortgage professional working for a local bank or mortgage company will provide you better customer service. They are more knowledge about local loan programs, trends and options than an online lender.
Before you call have:
1. Most recent pay stubs
2. Most recent tax returns
3. Most recent bank statements
4. Most recent list of outstanding loans. (i.e. car loans, bank loans, credit cards)
Armed with this information your mortgage professional will be able to provide you with an accurate assessment of your home buying power.
And, by the way, do not let multiple lenders pull your credit multiple times. This will significantly drop your FICO score and, in some cases, make it impossible for you to buy a home.
Questions? Email me at nell@talk2nell.com
http://tour.prohomesites.com/n246cs4fvf/Domain/
2011 brings new challenges to home buyers and seller. As the old saying goes "For warned is for armed."
The magic words "your loan has been approved" are getting harder to hear. Home buyers are being asked to document and account for every penny, every financial action taken and get assurances from employers of continued job security. Home lending practices have drastically changed. Many programs home buyers relied upon have vanished.
According to RISMEDIA, August 2, 2010 article "Here are the top seven reasons banks are denying home loan requests:
1. Poor credit: The borrower may have a heavy down payment or excellent equity built-up in their house, but if their credit score is under a certain threshold, obtaining a new loan or refinance from a traditional bank is challenging. Even FHA (Federal Housing Administration) loans, which have traditionally catered to borrowers with lower FICO scores, have an average borrower credit score of 693, according to CNN Money, which is above the national average.
2. Insufficient liquidity: If the borrower does not have a heavy down payment (20%-30% for most banks) and strong excess liquidity, banks don’t want to take the risk on funding their loan.
3. Lack of income: The borrower does not have consistent proof of income for the last two to five years. Regardless of how good their credit score is or how much equity they have in their home, if they can’t show the bank proof of income, loan approval will be tough. This can be a big hurdle in the loan process, particularly for retired borrowers.
4. Lying on the application: Banks have learned their lesson and are no longer putting up with borrowers stretching the truth on their applications.
5. Debt: Borrower has excessive debt and their debt-to-income ratio exceeds the bank’s guidelines.
6. Unemployment: Most lenders will like to see at least two years of stable work to issue loan approval.
7. Self employment: Lenders are looking at self-employed applicants with a lot more scrutiny these days, making it very tough for these borrowers to get approved."
If buying a home of your own is part of your 2011 plan start with a phone call to an experienced loan originator. Here is where "buy local" can really pay off. A mortgage professional working for a local bank or mortgage company will provide you better customer service. They are more knowledge about local loan programs, trends and options than an online lender.
Before you call have:
1. Most recent pay stubs
2. Most recent tax returns
3. Most recent bank statements
4. Most recent list of outstanding loans. (i.e. car loans, bank loans, credit cards)
Armed with this information your mortgage professional will be able to provide you with an accurate assessment of your home buying power.
And, by the way, do not let multiple lenders pull your credit multiple times. This will significantly drop your FICO score and, in some cases, make it impossible for you to buy a home.
Questions? Email me at nell@talk2nell.com
http://tour.prohomesites.com/n246cs4fvf/Domain/
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