Posts Tagged ‘Debts’
Dispel These Myths About Short Sales And Foreclosures
January 26th, 2010 | 
Author: 
Dean Williams By:
Among the many solutions available to you if you are facing foreclosure is a short sale. Individuals and companies that promise fast foreclosure help often fail to inform you on the damage a short sale will have on your credit report. A foreclosure will remain on your credit score for 10 years and you’ll typically have to wait 2-4 years before you can apply for any loan that offers a reasonable rate. The truth is there is no credit score advantage to a short sale over a foreclosure. Both of these options will lower your credit score between 200 to 300 points. That means if you had a FICO score of 700, it may drop to 400 depending on the overall condition of your credit. A short sale will have the identical effect on your credit report as a foreclosure. The short sale will show up as a pre-foreclosure redemption status, costing you between 200 and 300 points on your FICO score. A Deed-In-Lieu of Foreclosure will affect your credit just as badly as a foreclosure.
A homeowner might consider letting their home go into foreclosure because it enables them to stay in the property, basically rent free, from four months to a year before being forced to vacate. But that fact does not mean a foreclosure is the better option because a short sale has the same effect on your credit. Another issue with short sale or foreclosure is that discharged debts are considered income according to the IRS. So if you have a $250,000 mortgage on your home it is foreclosed on or discharged by bankruptcy, the IRS treats that as if you received income of $250,000. Likewise, in a short sale the difference between the mortgage and what the lender agreed to sell it for will be considered forgiven debt, and you will be taxed on that amount. You can often negotiate that down to a lower level, but it is a tough process.
Contrary to popular opinion, short sales do not have shorter wait periods when compared to foreclosures before an individual can buy another home. Fannie Mae guidelines state that individuals need at least 24 months “seasoning” before they can be considered for home loans. Additionally, a seller could fall victim to a deficiency judgment where they will be held liable for the difference between the mortgage amount and the short sale price. It is up to the lender as to whether or not they will pursue a deficiency judgment.
If you wish to save your credit, and possibly keep your home, you should explore other foreclosure solutions. For instance, if there is enough equity in the home, a real estate investor may be willing to bring your payments current if you agree to sign over the deed and rent the home from them. You will lose ownership, but you’ll continue living in the home and once your hardship passes you may be able to repurchase the home from the investor or a new home. The key to this is finding a reputable real estate investor through a local real estate investment club. Should a homeowner find a real estate investor, and the circumstances are right, he or she may be able to stay in their home and salvage their credit altogether.
Foreclosures are not a pleasant experience and you probably want to end this misery as soon as possible. The best way to do this is not to stick your head in the sand! Start taking action and save your home.
Among the many solutions available to you if you are facing foreclosure is a short sale. Individuals and companies that promise fast foreclosure help often fail to inform you on the damage a short sale will have on your credit report. A foreclosure will remain on your credit score for 10 years and you’ll typically have to wait 2-4 years before you can apply for any loan that offers a reasonable rate. The truth is there is no credit score advantage to a short sale over a foreclosure. Both of these options will lower your credit score between 200 to 300 points. That means if you had a FICO score of 700, it may drop to 400 depending on the overall condition of your credit. A short sale will have the identical effect on your credit report as a foreclosure. The short sale will show up as a pre-foreclosure redemption status, costing you between 200 and 300 points on your FICO score. A Deed-In-Lieu of Foreclosure will affect your credit just as badly as a foreclosure.
A homeowner might consider letting their home go into foreclosure because it enables them to stay in the property, basically rent free, from four months to a year before being forced to vacate. But that fact does not mean a foreclosure is the better option because a short sale has the same effect on your credit. Another issue with short sale or foreclosure is that discharged debts are considered income according to the IRS. So if you have a $250,000 mortgage on your home it is foreclosed on or discharged by bankruptcy, the IRS treats that as if you received income of $250,000. Likewise, in a short sale the difference between the mortgage and what the lender agreed to sell it for will be considered forgiven debt, and you will be taxed on that amount. You can often negotiate that down to a lower level, but it is a tough process.
Contrary to popular opinion, short sales do not have shorter wait periods when compared to foreclosures before an individual can buy another home. Fannie Mae guidelines state that individuals need at least 24 months “seasoning” before they can be considered for home loans. Additionally, a seller could fall victim to a deficiency judgment where they will be held liable for the difference between the mortgage amount and the short sale price. It is up to the lender as to whether or not they will pursue a deficiency judgment.
If you wish to save your credit, and possibly keep your home, you should explore other foreclosure solutions. For instance, if there is enough equity in the home, a real estate investor may be willing to bring your payments current if you agree to sign over the deed and rent the home from them. You will lose ownership, but you’ll continue living in the home and once your hardship passes you may be able to repurchase the home from the investor or a new home. The key to this is finding a reputable real estate investor through a local real estate investment club. Should a homeowner find a real estate investor, and the circumstances are right, he or she may be able to stay in their home and salvage their credit altogether.
Foreclosures are not a pleasant experience and you probably want to end this misery as soon as possible. The best way to do this is not to stick your head in the sand! Start taking action and save your home.
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Kris Koonar By:
In order to survive cutthroat competition in the corporate world, companies have to offer world-class services, which are not only at par but also a cut above the rest. Companies have to provide good services consistently to be able to stay ahead, and to enable survival in providing consistent services; companies require constant and even flow of working capital.
Working capital or revenue is the basic requirement of any company to establish its day-to-day operations smoothly. The day-to-day operational expenses include the capital needed for conversion of raw materials to finished goods or services that can be marketed to generate profits or further revenue and other overhead expenses. Any company’s financial status and efficiency may be ascertained by the amount of working capital the company has.
However most small-scale companies have their assets blocked in accounts receivables. The buyers of the products or services usually make their purchases on credit. Hence the companies have a waiting period of thirty to sixty days or even more before they receive the payments of their products. However during this period of debts waiting to be cleared off, the companies face the crunch of generating the working capital for their daily operations.
As opposed to large-scale companies that have a number to options available to generate or maintain their working capital, small-scale companies often have problems in raising their capital. Thus small-scale companies have to be vigilant about the proper management of their working capital. In order to establish themselves and become successful small-scale companies have to find ways to generate the working capital.
Accounts receivable financing could be the key to solving the problems of deficit working capital. The purchasing of the outstanding receivables or invoices by an accounts receivable company is considered to be accounts receivable financing. This outright selling of the receivables brings in instant cash flow and offers many fringe benefits, giving respite to the fund requirements of the small-scale companies.
It is important to choose the right accounts receivable financing companies that suit all your business needs. Most accounts receivable financing companies offer the secured loan on the accounts receivables based on the age of the receivable. The more current the receivable is, the easier it is to get optimum funding against it. A receivable that is over 90 days usually is not considered for buying by the financing firm. The financing firms usually disburse up to 90% of the receivable bill amount.
However there are firms that can offer up to 95% amount. Rest of the amount would be paid when the debts are cleared off on the receivables. The amount of time taken to process the receivable bill financing is also an important factor to be considered; usually the process is done in 3 to 4 working days before the funds are released, but some well established and experienced firms release the funds in just 1 or 2 days. The fee charged by the financing firm may range from 1% to 5%, so go for the firm that offers a competitive service for a competitive price.
Thus the right accounts receivable financing company can serve many purposes, like providing the free working capital, which enables the firm to concentrate more on the business expansion activities rather than worry about the collections.
In order to survive cutthroat competition in the corporate world, companies have to offer world-class services, which are not only at par but also a cut above the rest. Companies have to provide good services consistently to be able to stay ahead, and to enable survival in providing consistent services; companies require constant and even flow of working capital.
Working capital or revenue is the basic requirement of any company to establish its day-to-day operations smoothly. The day-to-day operational expenses include the capital needed for conversion of raw materials to finished goods or services that can be marketed to generate profits or further revenue and other overhead expenses. Any company’s financial status and efficiency may be ascertained by the amount of working capital the company has.
However most small-scale companies have their assets blocked in accounts receivables. The buyers of the products or services usually make their purchases on credit. Hence the companies have a waiting period of thirty to sixty days or even more before they receive the payments of their products. However during this period of debts waiting to be cleared off, the companies face the crunch of generating the working capital for their daily operations.
As opposed to large-scale companies that have a number to options available to generate or maintain their working capital, small-scale companies often have problems in raising their capital. Thus small-scale companies have to be vigilant about the proper management of their working capital. In order to establish themselves and become successful small-scale companies have to find ways to generate the working capital.
Accounts receivable financing could be the key to solving the problems of deficit working capital. The purchasing of the outstanding receivables or invoices by an accounts receivable company is considered to be accounts receivable financing. This outright selling of the receivables brings in instant cash flow and offers many fringe benefits, giving respite to the fund requirements of the small-scale companies.
It is important to choose the right accounts receivable financing companies that suit all your business needs. Most accounts receivable financing companies offer the secured loan on the accounts receivables based on the age of the receivable. The more current the receivable is, the easier it is to get optimum funding against it. A receivable that is over 90 days usually is not considered for buying by the financing firm. The financing firms usually disburse up to 90% of the receivable bill amount.
However there are firms that can offer up to 95% amount. Rest of the amount would be paid when the debts are cleared off on the receivables. The amount of time taken to process the receivable bill financing is also an important factor to be considered; usually the process is done in 3 to 4 working days before the funds are released, but some well established and experienced firms release the funds in just 1 or 2 days. The fee charged by the financing firm may range from 1% to 5%, so go for the firm that offers a competitive service for a competitive price.
Thus the right accounts receivable financing company can serve many purposes, like providing the free working capital, which enables the firm to concentrate more on the business expansion activities rather than worry about the collections.
