Posted by Elizabeth Dennis on September 19, 2011 | No Comments
After you have found the house of your dreams, it is time to make an offer. This is usually where a realtor comes in as they can be helpful in negotiating as well as having all the proper forms on hand that need to be filled out. Remember that when you make an offer, it needs to be done so in writing so it can be legally enforceable. Also, remember that if a seller accepts a bid, you are bound to the agreement so don’t make an offer unless you are serious about purchasing the house or condo.
When you make an offer, it needs to contain other information in addition to the price that you are willing to pay. It must also include any terms such as if the seller is willing to pay any closing costs. It should also provide a target date for closing, the amount of earnest money that is to be deposited, how the real estate taxes and other bills are to be adjusted between the buyer and seller, provisions as to who will pay for title insurance and survey and a time limit after which the offer is no longer valid.
An offer on a house should also make clear and contingencies. These are such things that say the offer is only contingent upon other events. These other events can be such things as the buyer selling their house in order to have the funds to purchase a new one or the buyer being able to obtain specific financing. If these things do not happen, then the buyer won’t be bound by the contract. Another popular contingency is a satisfactory report by the home inspector. For example, the seller must wait a certain amount of days to make sure the inspector submits a report that the buyer can live with.
When you submit an offer, be sure to do so with plenty of room for negotiations. You will find yourself in a strong position if you are an all-cash buyer, have already been pre-approved for a mortgage or don’t have a home that has to be sold before you can purchase a new one. Also, check to see why the seller is getting rid of the house. It may be that the house is vacant and eating up money each month. Or the seller could be in the middle of a divorce and wants out as quickly as possible. All of these factors work in the buyer’s favor as you may be able to make an offer much lower than the asking price and have it accepted.
Upon making an offer, it becomes binding if the seller signs and acceptance just as it stands. However, the seller may want to make some changes and at that point, the buyer receives a counteroffer. The buyer can then reject or accept the counter or make a counter to your offer. Any time there is a change in terms; either side can accept or reject it. You can even take back an offer up until the point that it has been accepted and you have gotten notice of that acceptance.
Posted by Elizabeth Dennis on August 29, 2011 | No Comments
Purchasing a house can be a very stressful time in someone’s life. There are one thousand decisions that must be made. Some of these choices are small while others can be quite large. One of the smaller decisions that can sometimes be forgotten is dealing with title insurance. This small insurance policy may be one of the best things you’ve ever purchased as it can protect you from any future potential problems and save the buyer thousands of dollars as well.
The main purpose of title insurance is so no one else can lay claim to your property. It will also provide future piece of mind that you will not incur any unexpected debts on your house. While you may not think that this can happen to you, it is better to be safe rather than sorry. Even if you have owned the property for years, title insurance means that the lender is reassured regarding their loan and the owner knows that they are protected from any possible problems.
There are numerous threats that can arise when it comes to property. For example, a long lost heir may suddenly materialize and claim the property, a previous owner may have taken out a loan on the property which could become the new owner’s debt, or a previous owner may have taken out a mortgage without the husband or wife knowing about it.
If any of these problems arise, a new owner may be forced to move out of the home if they don’t have title insurance. In addition, the new owner might find themselves legally bound to pay a debt on a house that is no longer yours. However, if you have title insurance than the title company will be the one to fight any battles, litigation or payments towards your case. In the extreme case you are forced to move out of the property, the title company will either pay you cash or purchase the mortgage from the lender.
While most homeowners only think about fire or flood insurance, title insurance costs very little for a lot of peace of mind. While regular insurance will allow you to keep your land in the case of your property being destroyed in a natural disaster, title insurance protects the owner if the actual house is taken away.
The nice thing about title insurance is that it will be in effect as long as you are in and own the house. In addition, after paying an initial premium there are no more fees to be paid. This is a small price to pay for the reassurance that your home cannot be taken away from you by some unforeseeable surprise that could occur at any point down the road.
Your lender should be able to show you more details on title insurance and the paperwork can be ready by the time you are ready to close on the house. While not a requirement, it is certainly worth looking into when purchasing a new home.
Posted by Elizabeth Dennis on August 8, 2011 | No Comments
When purchasing a house either for the first time or for the fifth, one of the most important things to look at is the interest rate. Because interest rates change on a daily basis, it is important to keep up with the general trend and try to get the lowest rate you can. This is because even a difference of 2% can save you thousands of dollars over the life of the mortgage.
Daily mortgage rates are based on the simple concept that banks and other lending institutions make money when they loan you money. This is where the interest rate comes from. You are paying the bank back more money than they originally lent you so; they are making more in the end. However, your bank is also borrowing money, only they go to the federal government for funds. These loans are associated with the Federal interest rate which is otherwise known as the prime rate or the overnight borrowing rate. Because the bank is also borrowing money, they want to make more off of you than they owe, so the mortgage rate you get will always be higher than the prime rate.
There are many factors that go into determining the daily mortgage rate. Some of these include the return your bank or lending institution is making on short term investments, medium length investments such as treasury notes and long term investments and loans such as treasury bonds.
Currently, the daily mortgage rate for a 15 or 30-year fixed loan are some of the lowest they have ever been. This generally signals a point where it is a good time to buy a home. This is especially true if you lock in the low rate over the course of the loan and you will find yourself saving significant money when interest rates eventually go back up.
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