If you’re in the process of purchasing a new home, on your bank paperwork, you may have noticed something called “mortgage insurance.” Not sure what it is? There are several different types of insurance that homeowners should be familiar with. Here, I will explain the basics.
Title insurance from the seller comes from the title company. It protects home owners and lenders from damage or property loss that may happen because of liens or other defects in the title to the property. Each title insurance policy is subject to specific terms, exclusions, and conditions.
Homeowner’s insurance/hazard insurance/fire insurance is a policy issued from an insurance company and it protects your property as well as the contents and possessions inside. It also provides liability coverage against accidents in the home or on the property. At closing, homeowners will pay for the first year’s policy in full.
This type of insurance is not a benefit to a homebuyer. When a lender provides a loan and the buyer puts less than 20% down on the purchase, the lender takes a bigger risk. If the buyer ends up defaulting on the loan and they don’t have much “skin” in the game, it’s possible that the lender won’t cover their loan amount when it comes time to liquidate the property. This cost can be paid within your monthly mortgage payment or up front and it will cover the lender’s loss if something were to happen. For some types of loans, particularly FHA loans, the premium will last for the life of the loan, even though your equity position might get you above the 20% mark. Conventional financing will typically have a provision for mortgage insurance that can be removed once the homeowner has 20% equity in the home.
Buying a home requires many different steps and there is a lot of research that is required. The insurance process can be complex and sometimes confusing, especially if you haven’t gone through the home buying process before, and that’s one of the many reasons why it is important to work with a well-qualified, experienced, hands-on Realtor. If you have questions about it, I’m happy to sit down and talk with you about any questions you may have!
The process of buying or selling a home is very detailed and requires a lot of moving parts. Once the end is in sight, you’ll need to prep for closing day. Planning for closing day can help make things run a little bit smoother. So whether you’re a buyer or a seller, here are some important must-knows on what you’ll need to have in place for closing day.
For the seller:
- Repairs will need to be done and receipts obtained
- Before closing can happen, all repairs that were requested during the selling process will need to be complete. Once everything has been done, be sure that all of that is documented well and that you have all receipts readily available.
- Be ready for a buyer walkthrough
- Once repairs have been completed, the buyer will likely want to do a walkthrough to make sure everything looks in order.
- Arrange for your utilities to turn off
- Call your utility companies, cable/Internet company, and any other services that will need to be turned off and transferred to your new residence. However, it’s important to note that you shouldn’t cancel your homeowner’s insurance on your current address until the final sale of the home has been recorded.
- Gather all brochures, keys, garage door openers, etc.
- If you have collected brochures/manuals on specific appliances in the home, or you have other important documents that need to be left for the new homeowner, make sure you have those readily available. In addition, you’ll need to leave them the keys to the home, mailbox, and any garage door openers you have.
- Sign documents
- This is the biggest step that transfers ownership and gets the process moving toward completion! It can happen several days before the “closing date.”
For the buyer:
- Obtain receipts for completed repair work
- If repairs were done in the home you’re purchasing, make sure you get all of the receipts and warranties associated with the work that was done. Keep these in your records in case you need to refer to them later or in case something goes wrong with the repair down the road.
- Do a walkthrough
- This is your chance to make sure that the repairs were done right and that things are good to go so you can move forward with signing closing papers.
- Set up utilities
- Call your utility company and schedule a time when you want water/electricity to come on. While you’re doing this, schedule a time for Internet/cable service to be hooked up, or any other services that you will need ready to go when you first move in.
- Sign any last minute lender information
- This is an important step! You will need to sign a closing disclosure that needs to be acknowledged to start a 3-day waiting period before you can sign final closing documents.
- Sign documents at escrow
- Here, you’ll sign papers that allow you to complete the home buying process. After the sale is recorded, you’ll get keys to your home and you’ll be able to start moving in!
If you’re confused about which step comes next, don’t worry! I will be there to walk you through the process. If you’re looking to buy or sell a home, contact me today for information on how I can help.
Buying a home is an incredibly exciting time! It also involves a lot of details and it can be a little overwhelming at times – especially if this is your first time buying a house! To make things a little easier, here are some tips and information that you should keep in mind when it comes to making one of the biggest purchases in your lifetime.
#1: Don't change your financial position.
When you’re buying a home, it’s important to keep your financial position steady. Don’t quit your job and try to find something new. Also, it’s not a great time to become self-employed, where your income could become unstable. In addition, be sure that you keep the money that you have set aside for closing costs in a place where it will not be spent. Wait to make big financial changes after you have closed on the home and have moved in.
#2: Don't change your credit position.
Having good credit is a big part of securing your loan and moving into the final stages of closing. Don’t buy a car, truck, furniture, boat, or motorcycle during the process of buying a home and be careful that you don’t max out your credit cards, apply for new ones, or fall behind in your payments on cards that you already have open. Don’t be lured into those “90 days same as cash” deals, either. That will show up on your credit report as well. Making these types of mistakes can cost you time and could be detrimental to the overall process of buying a home.
#3: Don't change your bank accounts.
This may not sound like a big deal, but changing your bank accounts or making large deposits could throw a kink in things. Before you do this, check with your loan officer.
#4: Be ready to provide a lot of information.
Get ready to provide a lot of personal paperwork and have any forms completed in a very specific timeframe. Federal guidelines have changed a bit and there are new deadlines that have to be strictly adhered to. Don’t worry, your loan officer and your Realtor will walk you through every step so you know exactly what’s needed and at what time.
#5: And of course, be honest and open.
Don’t omit debts or liabilities from your loan application. Now is the time to be very clear, not withholding facts that could help expedite the loan process.
Most importantly, try not to stress. It’s normal to be overwhelmed at points in the process and feel doubt how things are going. So, when in doubt, call your Realtor or loan officer, but try not to blame us for the rules – we didn’t make them up! We are glad to help you through the many steps and make sure you come away from this happy and excited to be in your new home!
Tips Provided by Nancy Johns, Blog Written by Brooke Strickland (brookestrickland.org)
At some point in your life, it’s common to feel some kind of buyer’s remorse. Whether it’s a small item at the store that you bought on an impulse or a car that you bought that you wish you wouldn’t have spent so much money on, there is likely something that has made you want to go back and return it or change the situation somehow. Buying a home is probably the biggest purchase you’ll make in your lifetime, so when you go into it, keep in mind some simple things that will help you avoid having buyer’s remorse. Once you sign on the dotted line to become a homeowner, be sure that you’ll feel excitement….not remorse!
Tip #1: Find a realtor that is focused on your needs and wants.
When you’re searching for a home, work with a Realtor that understands your “must haves” and “would likes” so you know that he/she has your best interest in mind. If your agent doesn’t have a clear idea of what it is you need or want in a home, you’ll waste time and likely end up feeling frustrated. On the flipside, remember that homes on the market now are moving very quickly and you have to be ready to make a decision. Know what you want from the get go and know what you can spend. Get prequalified right away so you know the financial portion of the home buying process.
Tip #2: Don’t compromise on your core requirements.
Keep your core requirements at the core! It’s easy to find a house that “almost” fits the bill, but if it doesn’t have the core of what you need, keep shopping. For example, if you know you need at least 2 bathrooms but the one you really liked had just one, don’t settle. In addition, don’t let your spouse or another family member try to talk you into a home that doesn’t have everything you’re looking for.
Tip #3: Remember that your wish list is just a wish list.
While core requirements can’t be compromised, be sure that there are things that you can compromise on. For instance, if you know you don’t need a formal dining room, but it’s on your wish list as something that you’d like if possible, remember that it’s not a necessary requirement. Know what you can live without when you are going through the home buying process.
Tip #4: Don’t let the excitement get to you.
The market today is hot – and that means that if you find a home that you love, you’ll have to act quickly. But don’t let the excitement or stress of getting an offer on the table get to you. Getting caught up in the heat of the moment – whether it’s in a bidding war on a home or just trying to get the details wrapped up in a timely fashion, remember to sit back and take a deep breath.
One of the most popular real estate trends in the last several years has been home staging. Television stations like TLC and HGTV have showcased how important and effective real estate home staging can really be. Real estate professionals and home sellers all over the country have implemented the home staging techniques that we have seen in recent years, and because of that, homes often sell faster and for a higher amount than homes that are not staged. Not sure if home staging really works? Check out the top 3 advantages of having your home staged when it comes to selling your home.
Advantage #1: Staged homes compete better in the market.
By staging, you are able to feature the best parts of your home. This means that buyers will see the advantages of your home over others and sometimes it even leads to a faster sale. It also presents a great impression when the appraiser arrives. This all means that you have the best chance of getting into a new home faster since you will get the money from your home quicker. This also saves you the carrying costs of maintenance, utilities and more.
Advantage #2: Staging makes an emotional connection.
When your home is staged well, potential homebuyers can envision themselves in the space. In addition, it’s important to know that even when it comes to home shopping, potential home buyers will use their emotions to make part of their decision on which home they want. They will remember how the home made them feel when they entered and walked around that house. They will make an emotional connection with the space almost immediately upon seeing it and when they can start seeing themselves in that space, there is often a sale.
Advantage #3: Pictures are more appealing.
Many prospective home buyers start researching homes online before they go into any homes. With unattractive pictures online, they might pass by the home quickly, simply because they don’t see the value in the home. Staging the home means that your pictures will turn out better and in turn, give you the visual edge that you’ll need to get buyers to set up showings.
Of course, choosing an agent that will effectively market your home is key, and professional staging can enhance your competitive advantage. Reveal why your home has appeal and get your home staged today!