Real Estate Corner…
Q. What experts should I talk to if my home is about to go into foreclosure?
A: Avoid scammers, and talk to one or more of these professionals:
- Your REALTOR® will help you review your options.
- A Foreclosure Counselor will help you evaluate your current financial situation and serve as an advocate with your bank, free of charge.
- A Tax Expert will advise you if you do a short sale or deed-in-lieu of foreclosure since forgiveness of debt may be considered taxable income.
- A Credit Counselor can help you develop a plan to avoid future financial difficulty as well as help you repair your credit score.
- An Attorney can help you if your lender has filed a foreclosure lawsuit.
For more information on avoiding foreclosure, call and ask for my Free Consumer Report called “Options To Avoid Foreclosure.” I’ll be glad to send a copy right over to you.
Do you have a real estate question you want answered? Feel free to call me at 909 731 5374. Perhaps I’ll feature your question in my next issue!
Lending Money To Family
Nearly everyone has probably borrowed money from a family member at one time or another, but getting $20 to fill the gas tank is a far cry from asking for a loan to start a business or put a down payment on a house. Lending larger sums of money to a family member can be incredibly helpful to the borrower, but a defaulted loan has the potential to ruin relationships, so it’s wise to tread carefully when it comes to money and family.
These are a few things to keep in mind when you’re considering lending money to a loved one.
- Don’t Skip the Paperwork: Even though you’re not a bank, creating a loan agreement is still a very good idea. There are loan contract templates online to get you started, but some basics to include are the amount lent, interest rate, and terms of repayment.
- Not Building Credit: Young adults often need to borrow from their parents for big expenses (like buying a first home). It’s important to keep in mind, though, that while the interest rate on a family loan is likely to be low (or zero), it’s a loan that won’t help you establish or rebuild good credit.
- Tax Implications: The IRS has established minimum interest rates, even on family loans. If you don’t charge any interest, the IRS considers that a gift—and monetary gifts are taxed differently. To avoid complications later, make sure you’re using the current federal loan rate and documenting the loan properly
