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How Do I Evaluate An Offer?
Well, as this story shows, there’s more to an offer than the price tag. Factors you should consider:
- Is this offer at, near or above my asking price?
- Are there clauses and additions in their offer that change the terms and final price substantially?
- How long since I had another offer, or expect another offer? Can I wait?
Remember every month you’re probably still paying mortgage, taxes and insurance. If you have several offers… remember that an offer isn’t a completed sale.
Compare the risk and likelihood of a completed sale for each buyer including things like “contingencies”, where your sale depends on their sale. and whether they’re pre-approved for the offer they’re making.
Remember you have three options for an offer – accept it reject it or prepare a counter-offer that improves the terms for you in some way.
Understanding Your Loan Estimate: Terms, Payments and Closing Costs
The first page of your Loan Disclosure shows the Loan Terms Projected Payments and Costs at Closing.
The Loan Amount, of course is the total you are borrowing. But the Interest Rate alone doesn’t represent all of your borrowing costs. The APR figure on Page 3 shows that.
Likewise, Monthly Principal & Interest aren’t the complete amount you will actually PAY each month.
The Projected Payments figures add other costs, such as Mortgage Insurance Estimated Escrow, Taxes, Insurances and Assessment to show the approximate amount you will pay each month, over time.
The Estimated Closing Costs are directly loan-related. while the Estimated Cash to Close adds other known closing costs to tell you the estimated cash you’ll need to have to close this loan.
Title Insurance Explained Visually
What is title insurance and why should any buyer get it when purchasing a home (single family, townhouse, condo, apartment, or whatever format your home purchase takes)? Doesn’t the attorney or settlement company handling the closing see to it that you have a clear title? Isn’t this just another way for someone to siphon a few coins off a real estate transaction?
Title insurance prevents the property owner from suffering financial loss if, at any time during his ownership of the property, someone comes along who can show that they have full, or partial, ownership of the property instead.
A careful title search is done at the time property changes hands. On rare occasions mistakes are made anyway. Property can change hands in a number of ways including by deed, by will and by court action. Typically, these proceedings are recorded in different places. Searching the history of ownership to be sure nothing has fallen through the cracks is a tedious job that requires alertness, intelligence, and skill.
It is very likely that the value of your property will go up over the years. As time passes, these elements are likely to result in your home equity’s being your largest asset. Just how devastating would it be if you eventually discovered that someone else owned what you’d always thought was your home?
Do yourself a favor. When you buy a home, buy title insurance. And watch the video to understand the essentials.
What Are VA Home Loans?
What Are VA Loans?
As the video says, the name is misleading – they’re not loans FROM the VA.
The VA – short for “US Department of Veterans Affairs” – is the Federal military veteran benefit system.
The VA administers benefits and services for Servicemembers, Veterans their dependents and survivors.
Programs related to home loans are one of their key services.
The VA is not a bank; they do not provide home loans themselves.
But they do guarantee a portion of home loans provided to veterans and other eligible people by banks and mortgage companies.
These guarantees enable lenders to provide more favorable terms.
They are are commonly called “VA Loans”.
They cover buying, building, repairing, retaining and adapting homes for personal occupancy by eligible Veterans and survivors.
What Happens After I’ve Applied For My Loan?
Once you’ve supplied the 6 required piece of information and included any other information the lender deemed necessary, you’ll receive a Loan Estimate within 3 business days.
Once all the information has been verified IF the loan is approved the lender will provide a Closing Disclosure to you three business days before loan consummation. T
hey’ll usually set a date for loan consummation – which may also be at your closing meeting.
Closing is basically transferring ownership of the property; consummation is commmitting to the loan itself.
Once both are completed, you should be planning your move-in.
What Is Mortgage Insurance?
Like the video shows, mortgage insurance is a policy that protects lenders against some or most of the losses that result from defaults on home mortgages. Like home or auto insurance, mortgage insurance requires payment of a premium, is for protection against loss, and is used in the event of an emergency.
If a borrower can’t repay an insured mortgage loan as agreed, the lender may foreclose on the property and file a claim with the mortgage insurer for some or most of the total losses.
You generally need mortgage insurance only if you plan to make a down payment of less than 20% of the purchase price of the home. The FHA offers several loan programs that may meet your needs.