Real Estate > Mortgage & Lending

How Important is an Attorney at a Real Estate Closing?

Thu, 19 Mar 2009 11:18:56 MST

Buyers must have an Attorney to represent their best interests at a Real Estate Closing. To not think having the representation of an attorney at a real estate closing is important is simply foolish for any home buyer.

An Attorney is licensed by the State they practice in to dispense legal counsel. The point is that there are innumerable issues that could create monstrous problems for a buyer at any point in the real estate contract process. An attorney is the best offense and defense and total resource to use, period.

Buyers should interview at least two or three real estate attorneys prior to entering into a real estate contract. A Buyer's Agent is one resource to use for referencing an Attorney.

Are Reverse Mortgages a Good Thing for Seniors?

Thu, 19 Mar 2009 11:11:27 MST

The answer to this question at the point of equivocating is "it depends". Reverse mortgages are just one of the many mortgage products available to homeowners.

Before any decision is made to enter into a reverse mortgage the homeowner should seek the counsel of a reputable real estate attorney as well as a financial advisor.

While money would be available to the homeowner, repairs, taxes, insurance etc. would need to be kept current. If there were a second mortgage on the property that too would need to be current at all times.

A reverse mortgage is not a magic pill that will erase all financial burdens for the homeowner.

When Buying a Home Can I Request the Seller Contibute To Closing Costs?

Thu, 19 Mar 2009 11:10:07 MST

When writing a real estate purchase agreement/sales contract most anything can be negotiated. The issue is will the seller agree to contributing towards closing costs? If a buyer is well qualified and can secure a mortgage from a lender then a seller may find it in their best interests to contribute some cash towards the buyers closing costs.

If this is what makes the deal work then it is likely that through some careful and friendly back and forth negotiation all the parties will be pleased. This financial contribution/arrangement will get the buyer a home and the seller out from under a mortgage they may no longer want.

Buyers should consult with their Realtor, lender and attorney before initiating this sort of request.

Is a Short Sale a Good Idea to Avoid Foreclosure?

Thu, 19 Mar 2009 11:09:09 MST

A short sale is a means to avoid foreclosure. If your bank agrees to let you sell your home for less than is owed on the note/mortgage and your attorney concurs with the sale, then it would be in your best interest.

There are some caveats to a short sale. There may some some tax liabilities and/or the bank holding the mortgage may seek to recapture some additional money by other means.

It is best to have a qualified real estate attorney walk you through the entire process. Do not sign any documents until your attorney approves of and reviews all the paperwork from the bank.

What is the Escrow?

Thu, 19 Mar 2009 11:08:03 MST

Escrow is best known in the business of Real Estate. Mortgage Companies will set up an "Escrow Account" to pay property taxes, Insurance, Interest, Principal, and Home Owners Dues.

Typically homeowners will pay one twelfth of their yearly insurance, interest and property taxes by way of this escrow account.

A competent real estate attorney will be able to answer any questions regarding escrows.

Are Property Taxes Included In My Monthly Mortgage Payment?

Thu, 19 Mar 2009 11:06:59 MST

Yes, property taxes are part of the escrow and are included in the monthly mortgage payment along with the Principal, Interest, Taxes and Insurance.

Property taxes are computed based on the assessed value of the property and the local tax rate. The local taxes may be a significant amount of money. This dollar amount may affect the amount of the purchase price of the home buyers can financially handle. In some communities property taxes may be as much as $600 per month, and up.

Buyers should be aware of the local tax rates and property assessments. These numbers may or may not change a buyers decision as to how much home they can afford.

Buyers need to consult with their Realtor and real estate attorney to acquire this information.

Which Mortgage is best Fixed Rate or Adjustable Rate?

Thu, 19 Mar 2009 11:05:45 MST

In most cases a fixed rate mortgage is the best for a buyer. A fixed mortgage rate will remain the same throughout the term of the mortgage. An example is a six percent rate, your rate will be six percent on day one and still be at six percent at the end of thirty years.

An adjustable rate mortgage may be a good choice depending on the particular terms of the mortgage. If the adjustable rate is 5% and it will remain at the 5% level for three, five or seven years then it may be the right mortgage. This would benefit a family that knew they would be moving within the first few years, say a job transfer.

Buyers need to be aware that some adjustable rate mortgages have special conditions that could create a problem for the buyer in the second or third year if the cost jumped by several hundred dollars per month.

The choice of mortgage needs to be discussed within a family and within the framework of the lender and mortgagor. Realtors may also provide some guidance in these matters.

Buyer's should not sign any documents unless and until they understand all of the terms and conditions set forth.

What is a Loan Origination Fee?

Thu, 19 Mar 2009 11:04:11 MST

The Loan Origination Fee is charged by the lender/broker essentially as an administrative fee. The fee is typically one half of one percent, to as much as two percent of the loan amount (depending on whether the loan is "A" paper or sub-prime).

The Loan Origination Fee will usually go towards any commissions and paper processing costs the lender incurs.

This fee is paid to the Broker handling the loan paperwork and the Broker is additionally responsible for placing the loan with a lender.

Buyer's should seek guidance from their real estate attorney when working with a mortgage broker.

This May be A Great Time To Refinance

Thu, 15 Jan 2009 03:04:45 MST

If you own a home and have a mortgage that is "current" and somewhere around 7% you may want to consider a refinance. The latest 30 year fixed rate was 4.96% as of January 15, 2009.

It makes good financial sense to refinace for example a $200,000 mortgage at the latest rate. If you can save approximately $200 or more a month then do it. Even allowing for the costs involved with the refinance any homeowner would come out with a positive end result.

Contact a trustworthy lender and a competent real estate attorney and ask them their thoughts on the idea.

Are Bigger Lenders a Better Choice Than a Smaller Lender?

Thu, 01 May 2008 02:32:02 MST

Buyers should look at their individual needs when choosing a lender. Bigger lending institutions are not necessarily better than smaller lenders. It depends on the buyers circumstances.

Some lenders specialize in buyers with credit woes. Other lenders have special options for those with small down payments.

Some lenders have different style loan programs that will work for singles or seniors.

If you have special needs make sure you talk with the lender that will offer the most options to meet your circumstances.

How Do Closing Costs Affect My Interest Rate?

Thu, 01 May 2008 02:31:28 MST

If a buyer chooses to finance the closing costs on a home purchase the monthly loan payments will be higher. Paying closing costs out of pocket from cash on hand is the better decision.

Lenders will help a borrower do a cost analysis that will provide the difference between financing closing costs and paying at the time of closing.

In deciding which is the best process a buyer needs to understand that financing closing costs will effectively create a higher APR (annual percentage rate.)

What is the Difference Between Points, Fees and Interest Rate?

Thu, 01 May 2008 02:27:39 MST

Points are an up-front fee paid to the lender at closing to buy-down your interest rate. Each point is typically equal to one percent of your loan amount. The more you pay in points the more you may be able to buy down your loan rate. However it will cost more money at closing.

The interest rate is the rate a lender charges for allowing you to use their money to buy the home. This rate will determine how much your monthly payment will be. The higher the interest the higher your monthly payment.

There will always be some fees when obtaining a mortgage. These fees cover the cost of processing your loan. Administrative fees commissions etc.

These fees may also include title search fees, property survey appraisal etc.

It is best to discuss these items with both your lender and attorney.

Why is the Real Estate Market Losing Sales With Low Mortgage Rates?

Mon, 28 Apr 2008 02:21:26 MST

The real estate market is in the middle of a mortgage meltdown, with low interest rates. With fewer lenders and fewer mortgage products and tougher qualification standards one might reasonably expect nervous investors to want higher interest rates to compensate for more risk.

Instead we have just the opposite:

Freddie Mac recently reported that interest levels for fixed rate financing dropped to 5.88%. This rate is not much higher than 2003 levels when rates were 5.21%.

What should matter to buyers is that rates are low relative to both recent levels and historic standards.

Buyers need to consult with their lender to determine if this is the right time for them to make a home purchase.

Reverse Mortgages for Seniors

Sat, 07 Feb 2009 03:16:21 MST

Are Reverse Mortgages for Seniors a good idea? The short answer is yes and in a very big way. The falling real estate values of many seniors homes has created a situation where seniors with no mortgage had planned to use the (once hefty) accrued equity (no longer relevant) in their current residence to fund their retirements.

Instead of putting homes on the market, seniors are electing to wait until the current glut of homes subsides. This will most probably take a period of 12-18 months. Before the real estate bust corrects itself it will be 2010.

Seniors have created the ripple affect of exacerbating the slow real estate buying market by not moving to senior and retirement communities.

Seniors looking to get information as to when they should put their homes back on the real estate market should consult with a Real Estate professional.

What Things Should I Consider With an Adjustable Rate Mortgage?

Sun, 27 Apr 2008 12:52:23 MST

Here are some things to consider with an adjustable rate mortgage:

Will a buyers income increase enough to cover higher payments?

How long will we be in the home?

How often will the interest rate be adjusted, yearly, every three years, five years?

Have Caps been placed on the adjustments?

Is the adjustable rate loan convertible?

If so, is there a cost to convert?

Is there a prepayment penalty?