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5 Reasons to Buy a Home in the next 5 Months

clock July 24, 2014 06:50 by author MyTitleDirect
by Hal M. Bundrick courtesy of Yahoo Homes : July 21st, 2014       A combination of market factors may make you think you're getting priced out of the home market. But one observer believes first-time homebuyers might want to consider making a move.  "I know it's hard to face rising interest rates and rising home prices at the same time," says Ilyce Glink, real estate expert and managing editor of the Equifax finance blog. "The good news is there's still plenty of runway if you want to buy a house this year." Glink believes first-time homebuyers should consider these five good reasons to buy a house before the end of the year: Home prices are still off their highs Yes, home prices are rising from the lows seen during the housing crash of 2008, but they're still nearly 20% off their mid-2006 peak. According to the S&P/Case-Shiller Home Price Index, average U.S. home prices are currently at summer 2004 levels. In markets that are still recovering, first-time homebuyers could see significant appreciation over the next few years, if they buy now. Interest rates are expected to keep rising Interest rates are slowly climbing, and as the Federal Reserve concludes its economic stimulus plan, rates are expected to continue to rise. Some experts believe mortgage interest rates could hit 5% by the end of 2014 or the first quarter of 2015, according to Glink. And even a small bump in interest rates can mean a significant jump in your monthly note. "If you're offered a 4.2% interest rate on a $400,000 mortgage, for example, your monthly payment will be $1,961, and you'll pay more than $300,000 in interest over the loan's 30-year term," Glink says. "If your interest rate were 4.9%, your monthly payment would jump to $2,115, and the total interest paid over the life of the loan would exceed $360,000." Rental rates are rising There is always an argument to be made regarding whether to buy or rent. It's all a matter of your particular situation – as well as the status of your local housing market. If you need to be mobile -- prepared for job transfers or out-of-state promotions -- or are continuing to search for "the perfect place," renting is probably right for you. However, if you would like to put down some roots, and rents are high in your hometown – it might be cheaper to buy. "Divide the list price of the home you're interested in by the annual rental rate of a comparable property to determine the price-rent ratio," Glink advises. "If it's below 20, chances are it's a good time to buy." Of course, buying a home means more than a mortgage. Remember to consider the other built-in expenses: maintenance, insurance, taxes and utilities. Consider your buying power Americans have been steadily reducing their debt load. Maybe you have, too. The lower your debt, the higher your buying power. Creditors will consider your debt-to-income ratio – how much debt you have, compared to your gross (before-tax) income. "Experts generally agree that you can spend between 28% and 36% of your gross income in total debt service -- that's your housing expenses plus your other debt payments," says Glink. With lower debt comes a higher score As you pay off student loans, credit cards and consumer debt, your credit scorewill improve. And that's one of the biggest factors mortgage lenders consider when determining the interest rate and terms of your loan. "You should definitely consider buying this year, because it's unlikely the housing market will look much rosier next year, when interest rates and home prices could be even higher," Glink says.


The Contract of Sale

clock July 17, 2014 09:09 by author MyTitleDirect
  Now that your ideal property has passed inspection, it’s time to enter into a contract of sale with the seller. A contract of sale in a real estate transaction is a legal contract documenting the promise to exchange a property from seller to buyer for an agreed upon value of money. The contract is usually prepared between the buyer’s and seller’s attorneys and outlines the following:  Who the buyer and sellers are and the mentions of subject property What price was agreed on, how much of it is the buyer paying upfront, and how much is being financed Contingencies such as a mortgage commitment from the lender and repairs to be made by the seller. There is usually a stated time frame for such contingencies.  List of personal moveable items agreed on by buyer and seller, e.g. Shed, pool, etc… An occupancy/possession agreement outlining when the buyer will obtain possession of the home and when seller will vacate the property When the closing date will be  


The Mortgage Application Process

clock June 25, 2014 08:32 by author MyTitleDirect
Now that you have negotiated a sales price and reached an agreement with the seller of your home, it is time to apply for your mortgage. You can first reach out to the lender that gave you the mortgage pre-approval, or any other lender if you desire. Since you now have a contract of sale and are ready to apply, it is not a problem to check out which lender can give you the lowest rates and fees. Once you decide on the lender, you will need to gather up some more documents. The lender will need to get a copy of the contract of sale, as well as a canceled check you are using for your down payment. If you decide to pursue with a different lender than the one who pre-approved you, you will need to re-gather your income and tax information mentioned earlier and have your credit re-checked. This can also happen with your same lender if a large amount of time has passed since your pre-approval was issued. The lender will also need a copy of any applicants’ driver’s license/identification card as well as their social security card to verify identity. Once all the appropriate documents are gathered, your mortgage application (1003) will be prepared. Your loan officer will send all of your documents and information into processing where your application will be finalized and set for disclosure. Your loan officer will send you your mortgage application and disclosures to be looked over, signed and sent back. The mortgage application and disclosures include, but are not limited to: ·       Your personal information including name, social security number, address, and contact information ·       Your current employer ·       The type of mortgage you are applying for ·       The purchase price of your home with your anticipated down payment ·       Your quoted interest rate and mortgage payment (this may not necessarily be your locked in rate) including principal and interest, mortgage insurance if applicable, and your estimated taxes and insurance ·       A good faith estimate of your total costs of the loan; this would include the bank origination fees, title fees, mortgage insurance if applicable, application fees and more Please look over the application and disclosures carefully. There is a lot of information included, so it would be advised to understand what you are applying for as well as make sure the information is accurate. You should contact your loan officer with any questions or concerns you have. Once you send back your signed disclosures, this is usually a good time to lock in your interest rate. Rates change on a daily basis, which means the rate you are quoted today may be different than the rate you qualify for next week. You want to make sure you get the best possible rate. Consult your loan officer about current rates and make a decision on when the best time to lock in would be.


Preparing yourself for a home purchase

clock June 16, 2014 07:18 by author MyTitleDirect
Preparing yourself for a home purchase is very important. When you are investing in one of the biggest purchases of your life, you want to make sure you are ready. Here are things to consider that may help: Look over your Financial Situation A. Check your credit. Run your credit (if you haven’t in the last 3 months); you are entitled to a free credit report once a year. There are online sites such Credit Karma who do this for free, or you can even look into creating an account with one of the three big credit Bureaus (Experian, TransUnion, Equifax). Knowing your credit score will give you an idea if you are in good standing to buy a home. You will also be able to see if there are any issues on your report that you need to take care of. Certain issues can prevent you from buying a home at this time, and remember too, the better your credit score, the better rate you will qualify for. B. Gather information on all of the monthly income you generate by collecting documents such as W2’s, tax returns and recent pay stubs. Your lender will look at your gross monthly income as the source for qualifying you. Your gross pay is the amount you receive before any deductions (federal and state taxes, social security, etc.). If you are not receiving any income, it is probably not the best time to look into buying a home. C. Make a list of all your monthly payment obligations. This includes all credit card payments, student loans, car payments and any other loan balances (you will see these on your credit report). You do not necessarily need the utility bills at this time because your lender will not use them for qualification. D. Prepare a budget based on how much of a mortgage payment you believe you will be able to afford. This may not necessarily be the amount you will qualify for, but it a good first step in understanding based on your monthly expenses, what you feel confident in being able to pay. E. Have a game plan for your down payment. Find out how much money you plan on using for your home purchase and if you will be using money from your checking/savings accounts, a retirement account, money inherited or even gifted from a friend or family member.   Read the rest on buyhomeapp.com here


Final Loan Approval: Underwriting Explained

clock June 5, 2014 09:30 by author MyTitleDirect
Now that your lender has received your appraisal report, they can begin underwriting your file. The underwriter will make the ultimate decision of whether or not the loan is accepted or denied. They will verify all documentation submitted by the processing department and make sure the information meets the loan program guidelines. If there are any deficiencies, they will ask for additional documentation to remedy them. Once they’re comfortable that all guidelines and criteria have been met, a final commitment will be issued along with the final rate-locked Good Faith Estimate. Signing the Commitment It is now time to sign the final commitment. The commitment is a contract that is usually sent to all parties involved in the transaction including realtors and attorneys. Once you sign the commitment, you have accepted the conditions in the contract and your mortgage has been completed. At this point, both you and the bank are obligated to fulfill all the terms of the mortgage and failing to do so will put your down payment and other prepaid fees at risk. Now that the commitment is signed and executed, all parties are notified and you are now ready to work on closing.   Download the article on Buyhomeapp.com


What Is The Title Search Buyhomeapp.com

clock May 8, 2014 11:00 by author MyTitleDirect
What is Title Insurance? Title insurance is usually required by the lender to protect against loss resulting from claims by others against your new home. In some states, attorneys offer title insurance as part of their services in examining title and providing a title opinion. In other states, a title insurance company or title agent directly provides the title insurance. To save money on title insurance, compare rates among various title insurance companies. Under RESPA, the seller may not require you, as a condition of the sale, to purchase title insurance from any particular title company. Generally, your lender will require title insurance from a company that is acceptable, and in most cases you can shop for and choose a company that meets the lenders standards and save significant money on closing fees. Ask what services and limitations on coverage are provided under each policy so that you can decide whether coverage purchased at a higher rate may be better for your needs. However, in many states, title insurance premium rates are established by the state and may not be negotiable. If you are buying a home that has changed hands within the last several years, ask your title company about a "reissue rate," which would be cheaper. If you are buying a newly constructed home, make certain your title insurance covers claims by contractors. These claims are known as "mechanics liens" in some parts of the country. A way to compare title insurance quotes to see where you can save money is to look at the Good Faith Estimate. A Good Faith Estimate is (GFE) is not just full of “mandatory” charges by the bank. If you look at a GFE, you will see there are also Title Insurance charges on it. These charges, unlike popular belief, are not mandatory charges. In fact, nearly almost every charge on your GFE are all estimates, hence the name Good Faith Estimate. Here is a link to what the standard GFE looks like blank: http://www.hud.gov/offices/hsg/ramh/res/gfestimate.pdf.   Read the rest of the article here on buyhomeapp.com