Category Archives: Bad credit

Short sale and tax consequences

May 10, 2012   admin   No comments

Q: Do I have to pay tax after a short sale? I am selling my house short and the neighbor told me that the IRS requires lenders issue form 1099C for all debt that was forgiven. In my case, it is almost $70,000 and paying taxes on that much will be impossible.

A: Is this short sale on your primary residence? If yes, you should be fine, because The Mortgage Debt Relief Act of 2007 does not consider forgiven debt on your principal residence as a taxable income for either short sale or foreclosure. It also applies for debt reduced through mortgage restructuring. This provision is valid for up to $2 million in debt for a married couple, forgiven from 2007 through 2012.

Read the full post

  Tags: Short Sale, Tax

Can I settle with credit card company with no late payments?

May 05, 2012   admin   No comments

Q: Pulled credit scores through myFICO, and I have 752 and 779. I have 5 relatively small credit card balances, all under $1,000, and one large one for $17,800. I want to settle with credit card company for around $3,000. If they accept this offer, I would be able to quickly pay off the remaining credit cards. Will a credit card company settle if I have never been late with payments? I do not want to stop paying to preserve my scores. Right now, I am only able to pay the minimum monthly payments, and at this rate it will take forever. At the start of 2010, my salary dropped by $16,000 and I have lived from paycheck to paycheck. And things can get even tougher for me.

Read the full post

  Tags: Card, Credit Card

Spouse average FICO credit score is higher?

September 20, 2011   admin   No comments

Having drastically higher average credit score than that of your spouse sometimes presents a problem. Especially if your incomes are quite different, and you and the spouse are applying for a mortgage together to use both incomes in order to qualify. Both will be on the mortgage application. Normally, the spouse with the higher income is a primary borrower, whereas the spouse with the lower income is a co-borrower.

In ideal scenario, primary borrower has higher income and higher or close to that of the co-borrower average FICO credit score. But that is not often the case, so what happens when the co-borrower spouse has higher credit score?

If the average FICO score of the higher earner is only lower by 20 to 25 points than that of the spouse, he or she can remain primary.

Read the full post

  Tags: Credit Score, Higher

Short sale and tax consequences

August 27, 2011   admin   No comments

Q: Do I have to pay tax after a short sale? I am selling my house short and the neighbor told me that the IRS requires lenders issue form 1099C for all debt that was forgiven. In my case, it is almost $70,000 and paying taxes on that much will be impossible.

A: Is this short sale on your primary residence? If yes, you should be fine, because The Mortgage Debt Relief Act of 2007 does not consider forgiven debt on your principal residence as a taxable income for either short sale or foreclosure. It also applies for debt reduced through mortgage restructuring. This provision is valid for up to $2 million in debt for a married couple, forgiven from 2007 through 2012.

Read the full post

  Tags: Short Sale, Tax

Difference between prequalification and preapproval

August 27, 2011   admin   No comments

A mortgage prequalification is the very first step of home loan application process. Typical prequalification is issued by a loan officer and more than often based on ball park numbers which you provide, including salary and recurring expenses to estimate approximate maximum loan amount you may eventually be approved for. Your credit report is normally not pulled at this stage and no cost or obligation on behalf of either party is involved. So while a mortgage prequalification helps determine the dollar value of a potential loan, it is not by any stretch, a commitment to lend you money. A loan officer can’t make an approval in any shape or form, but give you a prequalification letter which you can use when making an offer on a property.

Read the full post

Chinese yuan, Walmart, home prices and economy

August 26, 2011   admin   No comments

As I mentioned in December 2010 in Economy is improving? I don’t think so, any economy two-thirds of which based on consumer spending has problems and big ones. And the US consumers will buy much less now as Chinese-made goods will get more expensive and gas prices are about to reach $5 per gallon. Both charts clearly show the Chinese yuan rising drastically in value against the US dollar in the last two to three weeks. The price of everything made in China will be going higher. And Walmart which caters to a huge number of US consumers and sells more of Chinese made goods than other retailers, seeing the problem.

CEO of Walmart, Mike Duke noticed something rather unsettling – Walmart shoppers, most of whom live quite literally paycheck to paycheck and shop in bulk at the beginning of the month when the paychecks come in, frequent the stores less and buying less.

Read the full post

  Tags: Economy
Page 1 of 1412345...10...Last »