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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


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


Setting A Closing Date: the How's & Why's

clock April 21, 2014 05:57 by author MyTitleDirect
Now that the title search is complete and you have your mortgage commitment signed, you are ready to set a closing date. When setting a closing date, there are a few things to keep in mind. First off, most people decide to close at the end of the month. The reason behind this desire is due to the fact that there is prepaid interest due at closing. This means that at closing, you are required to pay the interest for the month you are closing. The prepaid interest is calculated from the date you close until the end of that month. For example, if you close on the March 14th, you will pay interest from that date until March 31st. If you close on March 30th, you will pay interest until March 31st, or only one day’s worth of interest. Closing towards the end of the month will require less prepaid interest to be brought to the closing table. It is also important to understand that your 1st mortgage payment will not be due until the 1st full month after you closing is complete. This means that is you close on March 14th, your 1st mortgage payment will not be due until May 1st. Coordinating the date of your closing will take some planning. There are a few items to factor in.  First, you want to make sure all parties can attend. Parties in a home purchase will include:  the buyer’s attorney, the buyers, the seller’s attorney, the sellers, the bank’s attorney and the title company. All of these people will need to agree on a date, time and location. You also want to make sure to bring any necessary items. For instance, a necessary item could be a satisfaction of a judgment that which showed up on the title exam. Your attorney will let you know what these items will be, if any. You will also need a valid ID, such as your driver’s license or passport. Additionally, you may be asked to bring proof that your property taxes are paid (seller). Bank checks will also be needed for certain payments. You will be advised prior to closing on all of these conditions. Read the rest of the article on Buyhomeapp.com here


Home Inspection Report: The When and Why

clock April 9, 2014 10:27 by author MyTitleDirect
Once your offer has been accepted, but before you sign your Contract of Sale, it is very important to get your home Inspected by a qualified home inspector. This is a very important step in the home buying process. The home inspection consists of a very detailed look throughout the home. The main goal of a home inspection is to make sure that the home is safe to live in. For example, the inspector will take a close look at the roof to make sure it is well intact. They will also check to see if there is any structural or mechanical damage such as broken heating systems, or a collapsing floor. The basement will be checked for cracks and damage as well as your toilets and more. A termite report is usually needed as well, which you can have the home inspector do at the time of inspection to save you time and money. This isn’t required but it is generally cheaper compared to contracting a separate termite inspection agency.  It is very important to follow the inspector and take notes on what he is observing. Some issues may not arise now, but can turn into problems in the future, especially in older homes. It is important to be educated and prepared for possible future maintenance that you will need and how to avoid problems if possible.  An inspection is also another tool you can have in your back pocket for sale negotiation purposes. Damage that needs to be fixed on the home can be negotiated to have the seller pay for them or to even have the purchase price of the home lowered to compensate for the maintenance work needed.   Read the rest of this article from Buyhomeapp.com here


Title Insurance for Less? A new breed of insurance company is promising discounts for home buyers ~ W.S.J.

clock April 1, 2014 08:28 by author MyTitleDirect
A new breed of insurance company is promising discounts on a type of policy many home buyers don't even realize they need: title insurance. Almost everyone who buys a house also purchases title insurance. Mortgage lenders generally require that borrowers buy a so-called lender's policy. Owners can buy a separate policy for themselves. The insurers determine if there is clear ownership of the property and offer protection if someone later claims an ownership interest in it.   Brian DeYoung   Title insurance can cost hundreds of dollars for modest houses and thousands for multimillion-dollar properties. Yet many home buyers don't focus on the product, or the price, until they sit down at the closing. There often is little incentive to shop around, as established insurers typically charge similar premiums and some states set or cap prices. Consumers tend to rely on a mortgage broker, real-estate agent or lawyer to connect them with a title insurer. Now upstart insurers and agencies are challenging the status quo. Insurance agencies also are being more aggressive in competing for title-insurance business. Redfin, a real-estate agency based in Seattle that has pioneered the use of technology in real-estate sales, started a title-insurance agency, Title Forward, in early 2013. It is based in Philadelphia and sells policies in Maryland, Virginia, Pennsylvania, Georgia and the District of Columbia. Title Forward is telling customers it can save them money by helping them figure out which type of title-insurance policy they need—and whether they can do without the more-expensive "enhanced" policies many agents sell. These policies can cover home buyers if the seller doesn't pay a contractor who did work on the house just before the sale and later claims he is owed money, according to Adam Wiener, a Redfin executive. Enhanced policies cost as much as 17% more in the states where Title Forward works, he says. Title Forward's policies are issued by industry giant First American Financial. Sue-Ann Greenfield, an entertainment-industry business manager from Manhattan, was buying a second home in exclusive Sag Harbor, N.Y., last fall when she went onto the Internet to research closing costs. "I decided I was going to be proactive," she says. "Why am I spending all this money on title insurance, and I don't even know what it is?" Still, greater competition will benefit consumers, says Birny Birnbaum, executive director of the Center for Economic Justice, a nonprofit consumer-advocacy organization based in Texas. Mr. Birnbaum notes that state insurance departments have "requirements in place to make sure a company can pay its claims." In 2007, the U.S. Government Accountability Office, Congress's investigative arm, concluded that the title-insurance industry's reliance on agents who sell to real-estate and mortgage professionals and lawyers, rather than to consumers, presents potential conflicts of interest and raises questions about the "reasonableness of prices" paid by consumers. [The Wall Street Journal]   Read the entire Wall Street Journal article by Leslie Scism (email at leslie.scism@wsj.com) and Alan Zibel (email at alan.zibel@wsj.com) on their web site here