Title insurance is a policy that is usually issued by a title company to protect the lender against something that might have happened in the past, rather than something that might occur in the future. In essence, an extensive search of public records is conducted by the title company to validate who has held title to the property in the past. The lender wants to know if there are any liens, judgments or easements on the property that they should be aware of.
But title insurance also guards against hidden risks or unknown factors that might cause an encumbrance at some point in the future, such as unknown heirs, forged deeds or wills, misinterpreted wills, false impersonation of the true owner of the property, deeds signed over by persons of unsound mind, or defects in the recording of past titles. Title insurance covers the cost of the title search, and any legal fees that may result from any dispute over past property ownership. It is required by the lender and paid for by the buyer.
The smart home buyer will also purchase title insurance to protect their own interests. This is a one-time premium that protects the buyer or their heirs, as long as they retain an interest in the property.
Saturday, February 21, 2009
Saturday, February 14, 2009
First-Time Home Buyers FAQs
Buying a home is one the biggest financial decisions most people will make in their entire lives, so it's only natural to have questions about the process, especially for first-time home buyers.
What are the benefits of owning versus renting a home?
When you add up the tax benefits of owning a home versus renting a home, it costs no more to be a homeowner than it does to rent, in many cases. With this in mind, why help finance your landlord's financial goals when you can own your own home and, as your equity grows, increase your savings for the future as well?
Does my credit score affect my ability to secure a home loan?
When it comes to qualifying for a mortgage, the answer is never simply a matter of yes or no; it's a matter of when: When will you be ready to qualify? While your credit score does affect this process, with credit repair services, government loans, and other programs and strategies, home-ownership can be a reality for anyone willing to put in the necessary time and effort.
What's the difference between being pre-qualified and being pre-approved?
There's a world of difference. A pre-qualification is a statement based often on unverified financial data. A pre-approval, however, is a decision to loan, and carries a lot of weight with sellers. With a pre-approval, you are essentially a cash buyer, and not only do you know exactly how much you can afford, sellers will take your offer much more seriously knowing you are pre-approved.
What are the benefits of owning versus renting a home?
When you add up the tax benefits of owning a home versus renting a home, it costs no more to be a homeowner than it does to rent, in many cases. With this in mind, why help finance your landlord's financial goals when you can own your own home and, as your equity grows, increase your savings for the future as well?
Does my credit score affect my ability to secure a home loan?
When it comes to qualifying for a mortgage, the answer is never simply a matter of yes or no; it's a matter of when: When will you be ready to qualify? While your credit score does affect this process, with credit repair services, government loans, and other programs and strategies, home-ownership can be a reality for anyone willing to put in the necessary time and effort.
What's the difference between being pre-qualified and being pre-approved?
There's a world of difference. A pre-qualification is a statement based often on unverified financial data. A pre-approval, however, is a decision to loan, and carries a lot of weight with sellers. With a pre-approval, you are essentially a cash buyer, and not only do you know exactly how much you can afford, sellers will take your offer much more seriously knowing you are pre-approved.
Monday, February 9, 2009
New Stimulus Package Proposes Tax Credit For Home Buyers
Last week, the Senate verbally approved the Fix Housing First Act, an important amendment to their version of the Economic Stimulus Bill. The piece of legislation and the Stimulus Bill are still awaiting Senate and House negotiations, but could provide all home buyers of primary residences over the next year with a tax credit of $15,000 or 10 percent of the cost of the home, whichever is less. The credit will not need to be repaid unless the home is sold within two years of purchase. This Senate's version of the tax credit, if implemented, will replace, or “sunset” the current $7,500 credit.
As leaders in the real estate industry, it is important to recognize the relevance of this amendment which could set the housing market on a course toward recovery.
If you are not familiar with this Act, please click here for more information.
* Click here to download a step-by-step guide for contacting your Senator or Representative via phone or email.
* Click here for a composed note to send to you Senator or Representative.
Should the legislation become a law, it will act as a major incentive for home buyers and, coupled with several years of pricing corrections could boost the number of home sales around the country. Until then, get free information on the current $7,500 tax credit for first-time home buyers.
As leaders in the real estate industry, it is important to recognize the relevance of this amendment which could set the housing market on a course toward recovery.
If you are not familiar with this Act, please click here for more information.
* Click here to download a step-by-step guide for contacting your Senator or Representative via phone or email.
* Click here for a composed note to send to you Senator or Representative.
Should the legislation become a law, it will act as a major incentive for home buyers and, coupled with several years of pricing corrections could boost the number of home sales around the country. Until then, get free information on the current $7,500 tax credit for first-time home buyers.
New Stimulus Package Proposes Tax Credit For Home Buyers
Last week, the Senate verbally approved the Fix Housing First Act, an important amendment to their version of the Economic Stimulus Bill. The piece of legislation and the Stimulus Bill are still awaiting Senate and House negotiations, but could provide all home buyers of primary residences over the next year with a tax credit of $15,000 or 10 percent of the cost of the home, whichever is less. The credit will not need to be repaid unless the home is sold within two years of purchase. This Senate's version of the tax credit, if implemented, will replace, or “sunset” the current $7,500 credit.
As leaders in the real estate industry, it is important to recognize the relevance of this amendment which could set the housing market on a course toward recovery.
If you are not familiar with this Act, please click here for more information.
* Click here to download a step-by-step guide for contacting your Senator or Representative via phone or email.
* Click here for a composed note to send to you Senator or Representative.
Should the legislation become a law, it will act as a major incentive for home buyers and, coupled with several years of pricing corrections could boost the number of home sales around the country. Until then, get free information on the current $7,500 tax credit for first-time home buyers.
As leaders in the real estate industry, it is important to recognize the relevance of this amendment which could set the housing market on a course toward recovery.
If you are not familiar with this Act, please click here for more information.
* Click here to download a step-by-step guide for contacting your Senator or Representative via phone or email.
* Click here for a composed note to send to you Senator or Representative.
Should the legislation become a law, it will act as a major incentive for home buyers and, coupled with several years of pricing corrections could boost the number of home sales around the country. Until then, get free information on the current $7,500 tax credit for first-time home buyers.
Interests Rates Change Daily
Interest rates change constantly, but it is important to know that rates are cyclical. If rates are currently at historical lows then we know there is a strong probability rates will go up again, and vice-versa. Certain economic indicators such as unemployment data, consumer price index, retail sales data, and consumer confidence all have an effect on mortgage interest rates. But the key factor to watch is the relationship between stocks and bonds.
When the economy is slow and the stock market is "bearish," many investors move money out of stocks and into bonds and mortgage-backed securities. This causes mortgage interest rates to go down. When the economy is doing well, the stock market rallies and is considered "bullish." Investors then have a tendency to move their money out of that safe haven of bonds and mortgage-backed securities and back into stocks. As a result, mortgage interest rates go up.
When the economy is slow and the stock market is "bearish," many investors move money out of stocks and into bonds and mortgage-backed securities. This causes mortgage interest rates to go down. When the economy is doing well, the stock market rallies and is considered "bullish." Investors then have a tendency to move their money out of that safe haven of bonds and mortgage-backed securities and back into stocks. As a result, mortgage interest rates go up.
Monday, January 26, 2009
Mortgage Interest Rate Myths
This may come as a shock to many borrowers, but it's absolutely true. Mortgage interest rates are not set by the Federal Reserve and, contrary to popular belief, mortgage rates are not directly tied to the yields of US Treasury bills, bonds, or notes – including the 10-year Treasury Note. That's right. Despite what you might hear in the media, mortgage interest rates are actually set by lending institutions, and are based solely on the performance of mortgage-backed securities.
For years now, the media and inexperienced loan officers everywhere have suggested that the 10-year Treasury Note, a government-backed security, is directly tied to mortgage interest rates, that the two are separated by a specific interval – which is simply not true.
At a quick glance, yes, it's easy to see why the mistake is made. For 11 out of the 13 months recorded, the yield of the 10-year Treasury Note and interest rates for 30-year fixed-rate mortgages did follow a somewhat similar long-term path, despite obvious short-term divergences. However, take a closer look at the drastic change that occurs from January through March 2008. What's interesting is that, during this period, the Federal Reserve had cut interest rates six times, from September 2007, to March 2008, and yet mortgage rates were actually higher in March 2008 than they were a year before. Not only does this demonstrate that the yield of the 10-year Treasury Note is not pegged to mortgage interest rates, it also reveals that mortgage interest rates are not set by the Fed either.
For years now, the media and inexperienced loan officers everywhere have suggested that the 10-year Treasury Note, a government-backed security, is directly tied to mortgage interest rates, that the two are separated by a specific interval – which is simply not true.
At a quick glance, yes, it's easy to see why the mistake is made. For 11 out of the 13 months recorded, the yield of the 10-year Treasury Note and interest rates for 30-year fixed-rate mortgages did follow a somewhat similar long-term path, despite obvious short-term divergences. However, take a closer look at the drastic change that occurs from January through March 2008. What's interesting is that, during this period, the Federal Reserve had cut interest rates six times, from September 2007, to March 2008, and yet mortgage rates were actually higher in March 2008 than they were a year before. Not only does this demonstrate that the yield of the 10-year Treasury Note is not pegged to mortgage interest rates, it also reveals that mortgage interest rates are not set by the Fed either.
Wednesday, January 14, 2009
Week In Review
Units for Sale:
Jan. 4 - Jan. 10, 2009
(compared to the same week in 2007)
New listings down this week 37.67%
Pendings up 1.11%
Solds down 33.90%
As for Average Prices:
Jan. 4 - Jan. 10, 2009
Sold average sales prices decreased 14.14% to $242,093. In 2008 it was $281,978 for the same week.
Jan. 4 - Jan. 10, 2009
(compared to the same week in 2007)
New listings down this week 37.67%
Pendings up 1.11%
Solds down 33.90%
As for Average Prices:
Jan. 4 - Jan. 10, 2009
Sold average sales prices decreased 14.14% to $242,093. In 2008 it was $281,978 for the same week.
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