WHAT ARE CURRENT MORTGAGE RATES...... LOW!!!!
Current Rates
| National | Average Rate* | Points |
|---|---|---|
| 30-Year Fixed | 3.39% | 0.7 |
| 15-Year Fixed | 2.70% | 0.6 |
| ARM | 2.73% | 0.6 |
Friday, October 12, 2012
Mortgage Rates
Wednesday, October 3, 2012
Understanding Foreclosures
It is an unfortunate commentary, but when economic activity declines and housing activity decreases, more real property enters the foreclosure process. High interest rates and creative financing arrangements are also contributing factors.
When prices are rapidly accelerating during a real estate “bonanza”, many people go to any lengths available to get into the market through investments in vacation homes, rental housing and trading up to more expensive properties. In some cases, this results in the taking on of high interest rate payments and second, third and even fourth deeds of trust. Many buyers anticipate that interest rates will drop and home prices will continue to escalate. It is possible that neither will occur and borrowers may be faced with large balloon payments becoming due. When payments cannot be met, the foreclosure process looms on the horizon.
In the foreclosure process, one thing should be kept in mind: as a general rule, a lender would rather receive payments than receive a home due to a foreclosure. Lenders are not in the business of selling real estate and will often try to accommodate property owners who are having payment problems. The best plan is to contact the lender before payment problems arise. If monthly payments are too hefty, it may be that a lender will be able to make some alternative payment arrangements until the owner’s financial situation improves.
Let’s say, however, that a property owner has missed payments and has not made any alternate arrangements with the lender. In this case, the lender may decide to begin the foreclosure process. Under such circumstances, the lender, whether a bank, savings and loan or private party, will request that the trustee, often a title company, file a notice of default with the county recorder’s office. A copy of the notice is mailed to the property owner.
If the default is due to a balloon payment not being made when due, the lender can require full payment on the entire outstanding loan as the only way to cure the default. If the default is not cured, the lender may direct the trustee to sell the property at a public sale.
In cases of a public sale, a notice of sale must be published in a local newspaper and posted in a public place, usually the courthouse, for three consecutive weeks. Once the notice of sale has been recorded, the property owner has until 5 days prior to the published sale date to bring the loan current. If the owner cures the default by making up the payments, the deed of trust will be reinstated and regular monthly payments will continue as before.
After this time, it may still be possible for the property owner to work out a postponement on the sale with the lender. However, if no postponement is reached, the property goes on the block. At the sale, buyers must pay the amount of their bid in cash, cashier’s check or other instrument acceptable to the trustee. A lender may “credit bid” up to the amount of the obligation being foreclosed upon.
With the recent attention given to foreclosure, there also has been corresponding interest in buying foreclosed properties. However, caveat emptor: buyer beware. Foreclosed properties are very likely to be burdened with overdue taxes, liens and clouded titles. A buyer should do his homework and ask a local title company for information concerning these outstanding liens and encumbrances. Title insurance may or may not be available following a foreclosure sale and various exceptions may be included in any title insurance policy issued to a buyer of a foreclosed property.
Your local title company will be happy to provide additional information.
Monday, October 1, 2012
Choices…they define us or they destroy us.
- Give or take
- Love or hate
- Church or watching the NFL
- Soda or Water
- Exercise or snooze bar
- Investing or buying that 60” plasma
- Smile or frown
- Going for a walk or sitting on the couch
- Operating from a schedule or just winging it
- Clean my office and be organized or leave it messy and be unorganized.
- Return all of my calls and emails or blow them off and kid myself I will do it tomorrow
- Going above and beyond or just doing the minimum
- Do a business plan and set goals or hope and wish for success
- Working hard or doing the bare minimum
- Energy giver or energy sucker
- Embrace accountability or run from it.
- Burger or salad
- Embrace change or resist it
- Positive & optimistic attitude or a negative & pessimistic attitude
- Forgive or be mad and hold a grudge
- Dress professionally or dress like a slob
- Do my homework or don’t do my homework
- Practice or don’t practice
- Shoulders back or shoulders slumped
- Laugh or yell
- Hug or fight
Think about your life for a moment, what do you want and what does it take to get it? So, why haven’t you been doing what it takes to get it?
Before you start with all of the excuses, ask yourself - if you really had to do it, could you? Let me make it clear how this is a choice - I don’t even like to think these thoughts, but it will help you understand that you can do it, if you want it bad enough. If the person or people you care about the most lives depended upon it (life or death), could you do it? We both know the answer. Of course you could and would. Life is a series of choices - I call them the Y’s in the road. In most cases if you take the easy path - the one most people take - you will experience short term gain and long term pain. On the other hand if you have the courage to take the other path - the one most will not take - you will have some short-term pain, but long-term gain. So, make the right choice and have a life of pure magic!
Start by making the choice every day to FEEL GOOD. Because when you FEEL GOOD you are ATTRACTIVE. When you are ATTRACTIVE, you have AMAZING PRODUCTIVITY. When you have AMAZING PRODUCTIVITY, you have EXTRAORDINARY RESULTS. And when you have EXTRAORDINARY RESULT, you feel even better! It is the circle of success.
By Tom Tognoli
COO, Founder
Intero Real Estate Services
Thursday, September 27, 2012
Getting your Deam Home!
In 1750, Samuel Johnson wrote that “to be happy at home is the ultimate result of all ambition.” And there’s truth to this; for most Americans, our homes are our launch pads for being and doing our best in the world, and the places where we live out our most precious, private moments. So, if you follow our most important dreams to their logical conclusions, they almost all boil down to having a happy home, where we and our families can thrive and enjoy happy, secure lives.
Fortunately, dreams do come true - and dream homes can become reality. Here is a short list of musts for developing the vision, strategy, commitment and effort it will take to make your dream home your actual home.
1. Know what a dream home is - and is not. Like anything else in life, you can’t realize your dream home if you don’t know what it is - and isn’t, definitionally. For purposes of this conversation, our definition of a dream home is closely related to our aspirations and our visions in a couple of key ways. Aspirationally, dream homes take some work and effort to achieve - they aren’t usually handed to us on a silver platter.
And our dream homes are related to our holistic visions for our lives, as well. By that I just mean that our dreams of home are less about owning a particular building, and more about creating a vision for our whole life as it will be impacted by our choice of home. We want a home that will allow our children to flourish, that is safely located, that allows us to personalize it and either does or doesn’t require much work, depending on our personal preferences. By the same token, our dream home is also one that doesn’t create problems for our lives or prevent us from doing the things we want and need to do.
If a given home is beautiful, but owning it requires us to work overtime at a job we hate, causes relationship problems, or simply requires too much repair or work for the time and resources we have, then that home is - by definition - not our dream home.
Here are some other concepts of home that are often confused for dream homes, but don’ fit the bill. Your dream home should not be defined by:
Understanding what makes for a dream home - and what doesn’t - can help you avoid the common pitfalls of being upset when your dollar doesn’t stretch to get you a home like the one you saw on Million Dollar Listing, overextending yourself, or assuming that the types of homes your friends and relatives think are ideal for you are the same as your dream home. While they might overlap, they don’t always - and trying to fulfill someone else’s idea of what your dream home should be is the fastest way to create a nightmare home buying experience.
2. Get and stay clear on your personal vision. There are various tools you can use to create a clear vision of your dream home, to avoid the above pitfalls. The most important of these is to sit in a still and quiet place and literally start writing down what you want your life to look like after you’re in the home of your dreams.
Don’t start with the technical characteristics of the building: you’ll get there soon enough, and the reality is that your co-buyer’s wants and needs, your budgetary limitations and the inventory available on your local market at the time will all impact the granular details of the property you end up with.
Instead, start with big picture life objectives, like who lives with you; what activities everyone does in the home that may require dedicated nooks, crannies, whole rooms or outbuildings; where and how much you work (at home? 3 towns away? around the clock?); how you get there and home every day; and what you do in your down time - be it hiking, home fixing, entertaining or strolling to the corner cafe.
3. “Be stubborn on the vision and flexible on the details.” Amazon founder Jeff Bezos delivered this one-liner in explaining his philosophy of creative problem-solving. And it applies just as powerfully to the creativity that is essential when hunting for your dream home. Compromise is unavoidable. Whether you’re spending $25,000 or $2.5 million on your next home, you will be required to compromise in order to reconcile your dream with your financials, the dreams of any co-buyers you have and realities of the real estate market, the inventory of available homes and geographic and other realities.
You may want a water view, but your wife wants to walk to the shops - and no home exists with both of those things. Or maybe you want to keep your payment below $2,500 per month, but you also want to buy a move-in ready home in The Best School District Ever. And all of those things are simply not possible with the down payment money you have in hand.
Bottom line: you’ll need to be somewhat flexible on the precise specs of the home you end up in as your ‘dream’ home - and the only way to do this is to ensure that you know what your whole-life vision is. Once you have your vision of life/home document ready,
then you can get granular about the number of bedrooms, bathrooms and square feet you need, as well as location specifics, brushing your absolute must-haves and absolute deal-breakers in the most minimalistic of strokes.
Adopting this Amazon-style ‘flexibility on the details’ empowers your experienced local agent/partner to suggest creative solutions for homes that will allow you to create the happy home life you’re trying to achieve, despite the circumstantial limitations.
In any event, hold onto your vision of life vis-a-vis your home journaling document for later. If you end up in contract on a home and have second thoughts, it’s a powerful document to revisit before you finalize the deal, to make sure the inevitable compromises haven’t completely wiped out all traces of the life you hoped to create in this dream home.
4. Communicate your dream vividly to those who need to know. A frequently expressed dilemma of wanna-be dream home buyers is that their agent is not showing them homes that fit the bill. In my experience, this issue often arises when buyers’ champagne tastes and beer budgets don’t align, and their agent is trying hard to show them the best they can afford, but it still disappoints.
To make sure that you are communicating your vision and dream to your agent with crystal clarity, consider doing some or all of the following:
5. Mind your business. Dreams may seem fluffy and soft, but the dream of a home is one which requires you to click into hard-core numbers mode in order to make things happen. Don’t fall into the trap of fixating on images of wainscoting and tree-lined streets until your money matters have been fully handled. I’m often surprised at how many buyers believe their dream home is just out of their financial reach, but have so much fat that can still be cut from their monthly budgets: money they spend on things they would say are much lower than their home on their priority list.
Sit down and comb through your existing spending patterns with a fine-tooth comb and ask yourself whether your fantasy football habit is truly more or less important than getting closer to affording the home of your dreams. Talk with a financial planner and your mortgage broker about putting an action plan in place to eliminate bills that are impacting your ability to afford and/or qualify for your target type of home. Get clear, in your own household and spending plan, on what you can truly afford to spend on housing every month, versus looking to your mortgage broker to tell you what you can afford.
Making your dream home come true involves some heavy duty bookkeeping and an intense commitment to managing your finances in a way that lines up with your values.
6. Get uncomfortable. Being a grown-up is full of paradoxes, isn’t it? A few of my faves:
Here’s one more to keep in mind as you pursue your dream home: creating a comfortable home might require you to do some uncomfortable things. Writing - and sticking to - a spending plan, is one. Reading eye-glazing contracts and hundreds of pages of uber-boring HOA disclosures is another. Having frank conversations with your partner, negotiating, managing your emotions around affordability and the like - there are loads of uncomfortable moments that take place in and around the process of buying your home.
These discomforts are temporary. But avoiding these uncomfortable moments can get you into some long-term un-dreamy drama: surprise HOA special assessments, a decade of living in a home you (or your partner) truly despises and years of living paycheck-to-paycheck from having overextended yourself are a few that come to mind.
So, dive on into being uncomfortable for this short period of time, with the knowledge that doing so will set you up for long-term success in your dream home.
7. Know the difference between your vision for “this” dream home, and your long-term vision. The home you buy now might not be your forever home. It’s essential that you feel comfortable with the prospect of staying put for at least 5-7 years before you buy, in most areas. But don’t feel like this home must have every feature you’ll ever want to have in a home. Especially if you’re buying your first home, the reality is that you’ll likely move up several times in your future, as your career, earnings and savings grow over time.
Also, if your ‘dream’ home features list is particularly aggressive and/or your budget is particularly tight for your area, you might have to exercise serious visionary powers to visualize how you can develop the home you can currently afford into your dream home over time. Focus on location, expandability, and these other characteristics of a hidden gem of a home, and find someplace that is livable right now, but has the potential, with your hard work, to become the home of your dreams down the road.
So tell us, have you scored your dream home? If you're still on the hunt, what's on your short list of features that makes a home your family's ideal?
From Turlia
Fortunately, dreams do come true - and dream homes can become reality. Here is a short list of musts for developing the vision, strategy, commitment and effort it will take to make your dream home your actual home.
1. Know what a dream home is - and is not. Like anything else in life, you can’t realize your dream home if you don’t know what it is - and isn’t, definitionally. For purposes of this conversation, our definition of a dream home is closely related to our aspirations and our visions in a couple of key ways. Aspirationally, dream homes take some work and effort to achieve - they aren’t usually handed to us on a silver platter.
And our dream homes are related to our holistic visions for our lives, as well. By that I just mean that our dreams of home are less about owning a particular building, and more about creating a vision for our whole life as it will be impacted by our choice of home. We want a home that will allow our children to flourish, that is safely located, that allows us to personalize it and either does or doesn’t require much work, depending on our personal preferences. By the same token, our dream home is also one that doesn’t create problems for our lives or prevent us from doing the things we want and need to do.
If a given home is beautiful, but owning it requires us to work overtime at a job we hate, causes relationship problems, or simply requires too much repair or work for the time and resources we have, then that home is - by definition - not our dream home.
Here are some other concepts of home that are often confused for dream homes, but don’ fit the bill. Your dream home should not be defined by:
- the over-the-top fantasy mansion you saw on TV (if it’s bizarrely unattainable, in other words, it’s a fantasy home - not a dream home)
- some antiquated notion of the biggest, flashiest home with the most amenities
- the most expensive home you can afford
- your mother’s, sister’s or best friend’s dream home.
Understanding what makes for a dream home - and what doesn’t - can help you avoid the common pitfalls of being upset when your dollar doesn’t stretch to get you a home like the one you saw on Million Dollar Listing, overextending yourself, or assuming that the types of homes your friends and relatives think are ideal for you are the same as your dream home. While they might overlap, they don’t always - and trying to fulfill someone else’s idea of what your dream home should be is the fastest way to create a nightmare home buying experience.
2. Get and stay clear on your personal vision. There are various tools you can use to create a clear vision of your dream home, to avoid the above pitfalls. The most important of these is to sit in a still and quiet place and literally start writing down what you want your life to look like after you’re in the home of your dreams.
Don’t start with the technical characteristics of the building: you’ll get there soon enough, and the reality is that your co-buyer’s wants and needs, your budgetary limitations and the inventory available on your local market at the time will all impact the granular details of the property you end up with.
Instead, start with big picture life objectives, like who lives with you; what activities everyone does in the home that may require dedicated nooks, crannies, whole rooms or outbuildings; where and how much you work (at home? 3 towns away? around the clock?); how you get there and home every day; and what you do in your down time - be it hiking, home fixing, entertaining or strolling to the corner cafe.
3. “Be stubborn on the vision and flexible on the details.” Amazon founder Jeff Bezos delivered this one-liner in explaining his philosophy of creative problem-solving. And it applies just as powerfully to the creativity that is essential when hunting for your dream home. Compromise is unavoidable. Whether you’re spending $25,000 or $2.5 million on your next home, you will be required to compromise in order to reconcile your dream with your financials, the dreams of any co-buyers you have and realities of the real estate market, the inventory of available homes and geographic and other realities.
You may want a water view, but your wife wants to walk to the shops - and no home exists with both of those things. Or maybe you want to keep your payment below $2,500 per month, but you also want to buy a move-in ready home in The Best School District Ever. And all of those things are simply not possible with the down payment money you have in hand.
Bottom line: you’ll need to be somewhat flexible on the precise specs of the home you end up in as your ‘dream’ home - and the only way to do this is to ensure that you know what your whole-life vision is. Once you have your vision of life/home document ready,
then you can get granular about the number of bedrooms, bathrooms and square feet you need, as well as location specifics, brushing your absolute must-haves and absolute deal-breakers in the most minimalistic of strokes.
Adopting this Amazon-style ‘flexibility on the details’ empowers your experienced local agent/partner to suggest creative solutions for homes that will allow you to create the happy home life you’re trying to achieve, despite the circumstantial limitations.
In any event, hold onto your vision of life vis-a-vis your home journaling document for later. If you end up in contract on a home and have second thoughts, it’s a powerful document to revisit before you finalize the deal, to make sure the inevitable compromises haven’t completely wiped out all traces of the life you hoped to create in this dream home.
4. Communicate your dream vividly to those who need to know. A frequently expressed dilemma of wanna-be dream home buyers is that their agent is not showing them homes that fit the bill. In my experience, this issue often arises when buyers’ champagne tastes and beer budgets don’t align, and their agent is trying hard to show them the best they can afford, but it still disappoints.
To make sure that you are communicating your vision and dream to your agent with crystal clarity, consider doing some or all of the following:
- Send your agent the Trulia listings for homes that reflect features of your dream home - or the whole enchilada, if you can find it.
- Attend Open Houses and save flyers of homes months, even years, before you start house hunting in earnest, to share what you loved about them with your agent when the time is right.
- Ask your agent to show you at least one home that reflects what they *think* you want in your dream home - regardless of price. You might be stunned and astonished at what your dream home really costs, but the experience can help you manage your own mindset, and expectations, back into the realm of reality.
5. Mind your business. Dreams may seem fluffy and soft, but the dream of a home is one which requires you to click into hard-core numbers mode in order to make things happen. Don’t fall into the trap of fixating on images of wainscoting and tree-lined streets until your money matters have been fully handled. I’m often surprised at how many buyers believe their dream home is just out of their financial reach, but have so much fat that can still be cut from their monthly budgets: money they spend on things they would say are much lower than their home on their priority list.
Sit down and comb through your existing spending patterns with a fine-tooth comb and ask yourself whether your fantasy football habit is truly more or less important than getting closer to affording the home of your dreams. Talk with a financial planner and your mortgage broker about putting an action plan in place to eliminate bills that are impacting your ability to afford and/or qualify for your target type of home. Get clear, in your own household and spending plan, on what you can truly afford to spend on housing every month, versus looking to your mortgage broker to tell you what you can afford.
Making your dream home come true involves some heavy duty bookkeeping and an intense commitment to managing your finances in a way that lines up with your values.
6. Get uncomfortable. Being a grown-up is full of paradoxes, isn’t it? A few of my faves:
- Living an easy life takes a lot of hard work.
- With fashion and food, often less really is more.
- I get younger and younger with every day that passes. (Humor me, please.)
Here’s one more to keep in mind as you pursue your dream home: creating a comfortable home might require you to do some uncomfortable things. Writing - and sticking to - a spending plan, is one. Reading eye-glazing contracts and hundreds of pages of uber-boring HOA disclosures is another. Having frank conversations with your partner, negotiating, managing your emotions around affordability and the like - there are loads of uncomfortable moments that take place in and around the process of buying your home.
These discomforts are temporary. But avoiding these uncomfortable moments can get you into some long-term un-dreamy drama: surprise HOA special assessments, a decade of living in a home you (or your partner) truly despises and years of living paycheck-to-paycheck from having overextended yourself are a few that come to mind.
So, dive on into being uncomfortable for this short period of time, with the knowledge that doing so will set you up for long-term success in your dream home.
7. Know the difference between your vision for “this” dream home, and your long-term vision. The home you buy now might not be your forever home. It’s essential that you feel comfortable with the prospect of staying put for at least 5-7 years before you buy, in most areas. But don’t feel like this home must have every feature you’ll ever want to have in a home. Especially if you’re buying your first home, the reality is that you’ll likely move up several times in your future, as your career, earnings and savings grow over time.
Also, if your ‘dream’ home features list is particularly aggressive and/or your budget is particularly tight for your area, you might have to exercise serious visionary powers to visualize how you can develop the home you can currently afford into your dream home over time. Focus on location, expandability, and these other characteristics of a hidden gem of a home, and find someplace that is livable right now, but has the potential, with your hard work, to become the home of your dreams down the road.
So tell us, have you scored your dream home? If you're still on the hunt, what's on your short list of features that makes a home your family's ideal?
From Turlia
Tuesday, September 25, 2012
Escrow Functions
The Functions of an Escrow
Buying or selling a home (or other piece of real property) usually involves the transfer of large sums of money. It is imperative that the transfer of these funds and related documents from one party to another be handled in a neutral, secure and knowledgeable manner. For the protection of buyer, seller and lender, the escrow process was developed.
As a buyer or seller, you want to be certain all conditions of sale have been met before property and money change hands. The technical definition of an escrow is a transaction where one party engaged in the sale, transfer or lease of real or personal property with another person delivers a written instrument, money or other items of value to a neutral third person, called an escrow agent or escrow holder. This third person holds the money or items for disbursement upon the happening of a specified event or the performance of a specified condition.
Simply stated, the escrow holder impartially carries out the written instructions given by the principals. This includes receiving funds and documents necessary to comply with those instructions, completing or obtaining required forms and handling final delivery of all items to the proper parties upon the successful completion of the escrow.
The escrow must be provided with the necessary information to close the transaction. This may include loan documents, tax statements, fire and other insurance policies, title insurance policies, terms of sale and any seller-assisted financing, and requests for payment for various services to be paid out of escrow funds.
If the transaction is dependent on arranging new financing, it is the buyer’s or the buyer’s agent’s responsibility to make the necessary arrangements. Documentation of the new loan agreement must be in the hands of the escrow holder before the transfer of property can take place. A real estate agent can help identify appropriate lending institutions.
When all the instructions in the escrow have been carried out, the closing can take place. At this time, all outstanding funds are collected and fees- such as title insurance premiums, real estate commissions, termite inspection charges- are paid. Title to the property is then transferred under the terms of the escrow instructions and appropriate title insurance is issued.
Payment of funds at the close of escrow should be in the form acceptable to the escrow, since out-of-town and personal checks can cause days of delay in processing the transaction.
The following items represent a typical list of what an escrow holder does and does not do:
THE ESCROW HOLDER:
- serves as the neutral “stakeholder” and the communications link to all parties in the transaction;
- prepares escrow instructions;
- requests a preliminary title search to determine the present condition of title to the property;
- requests a beneficiary’s statement if debt or obligation is to be taken over by the buyer;
- complies with lender’s requirements, specified in the escrow agreement;
- receives purchase funds from the buyer;
- prepares or secures the deed or other documents related to escrow;
- prorates taxes, interest, insurance and rents according to instructions;
- secures releases of all contingencies or other conditions as imposed on any particular escrow;
- records deeds and any other documents as instructed;
- requests issuance of the title insurance policy;
- closes escrow when all the instructions of buyer and seller have been carried out;
- disburses funds as authorized by instructions, including charges for title insurance, recording fees, real estate commissions and loan payoffs;
- prepares final statements for the parties accounting for the disposition of all funds deposited in escrow (these are useful in the preparation of tax returns).
THE ESCROW HOLDER DOES NOT:
- offer legal advice;
- negotiate the transaction;
- offer investment advice.
Your local title company should be happy to provide additional information.
Wednesday, September 19, 2012
Items You need....
Items You Need When Applying For a Loan
Have These Items Ready When You Apply For a Loan
It used to be that lenders mailed out verifications to employers, banks, mortgage companies, and so on, in order to verify the data supplied by borrowers. Nowadays, the interest is often in speed and getting answers quickly so alternate documentation has become more widely used. Alternate documentation means that underwriting answers can be obtained with information supplied directly from the borrower instead of waiting around for verifications to come back in the mail.
The following is required for most standardized loans as part of alternate documentation processing. Items may differ according to whether your loan is a conforming (Fannie Mae or Freddie Mac), non-conforming (jumbo) loan, government loan, or a portfolio loan.
Verifications are still mailed out, but usually as part of quality control procedures.
These are the things you need to supply to your lender to get a quick approval using alternate documentation
Income Items
- W2 forms for the last two years
- Pay stubs covering a 30 day period
- Federal tax returns (1040s) for the last two years, if:
- you are self-employed
- earn more than 25% of your income from commissions or bonuses
- own rental property
- or are in a career where you are likely to take non-reimbursed business expenses
Asset Items
- Bank statements for previous two months (sometimes three) on all accounts. All pages.
- Statements for two months on all stocks, mutual funds, bonds, etc.
- Copy of most recent 401K statement (or other retirement assets)
- Explanations for any large deposits and source of those funds
- Copy of HUD1 Settlement Statement on recent sales of homes
- Copy of Estimated HUD1 Settlement Statement if a previous home is for sale, but not yet closed
- Gift letter (if some of the funds come as a gift from a family member)
- Gifts can also require:
- Verification of donor’s ability to make the gift (bank statement)
- Copy of the check used to make the gift
- Copy of the deposit receipt showing the funds deposited into bank account or escrow
Credit Items
- Landlord’s name, address, and phone number (for verification of rental)
- Explanations for any of the following items that may appear on your
credit report:
- Late payments
- Credit inquiries in the last 90 days
- Charge-offs
- Collections
- Judgments
- Liens
Other
- Copy of purchase agreement (if you have already made an offer)
- To document receipt of child support (if you desire to show it as income)
- Copy of Divorce Settlement (to show the amount)
- Copies of twelve months canceled checks to document actual receipt of fund
FHA Loans
- Copy of Social Security Card (or other documentation of social security number)
- Copy of Driver’s license
VA Loans
- Copy of DD214
Refinances
- Copy of Note on existing loan
- Copy of HUD1 Settlement Statement on existing loan
- Name, address, phone number, loan number of existing loan/lender
Wednesday, September 5, 2012
The Functions of an Escrow
Buying or selling a home (or other piece of real property) usually involves the transfer of large sums of money. It is imperative that the transfer of these funds and related documents from one party to another be handled in a neutral, secure and knowledgeable manner. For the protection of buyer, seller and lender, the escrow process was developed.
As a buyer or seller, you want to be certain all conditions of sale have been met before property and money change hands. The technical definition of an escrow is a transaction where one party engaged in the sale, transfer or lease of real or personal property with another person delivers a written instrument, money or other items of value to a neutral third person, called an escrow agent or escrow holder. This third person holds the money or items for disbursement upon the happening of a specified event or the performance of a specified condition.
Simply stated, the escrow holder impartially carries out the written instructions given by the principals. This includes receiving funds and documents necessary to comply with those instructions, completing or obtaining required forms and handling final delivery of all items to the proper parties upon the successful completion of the escrow.
The escrow must be provided with the necessary information to close the transaction. This may include loan documents, tax statements, fire and other insurance policies, title insurance policies, terms of sale and any seller-assisted financing, and requests for payment for various services to be paid out of escrow funds.
If the transaction is dependent on arranging new financing, it is the buyer’s or the buyer’s agent’s responsibility to make the necessary arrangements. Documentation of the new loan agreement must be in the hands of the escrow holder before the transfer of property can take place. A real estate agent can help identify appropriate lending institutions.
When all the instructions in the escrow have been carried out, the closing can take place. At this time, all outstanding funds are collected and fees- such as title insurance premiums, real estate commissions, termite inspection charges- are paid. Title to the property is then transferred under the terms of the escrow instructions and appropriate title insurance is issued.
Payment of funds at the close of escrow should be in the form acceptable to the escrow, since out-of-town and personal checks can cause days of delay in processing the transaction.
The following items represent a typical list of what an escrow holder does and does not do:
THE ESCROW HOLDER:
- serves as the neutral “stakeholder” and the communications link to all parties in the transaction;
- prepares escrow instructions;
- requests a preliminary title search to determine the present condition of title to the property;
- requests a beneficiary’s statement if debt or obligation is to be taken over by the buyer;
- complies with lender’s requirements, specified in the escrow agreement;
- receives purchase funds from the buyer;
- prepares or secures the deed or other documents related to escrow;
- prorates taxes, interest, insurance and rents according to instructions;
- secures releases of all contingencies or other conditions as imposed on any particular escrow;
- records deeds and any other documents as instructed;
- requests issuance of the title insurance policy;
- closes escrow when all the instructions of buyer and seller have been carried out;
- disburses funds as authorized by instructions, including charges for title insurance, recording fees, real estate commissions and loan payoffs;
- prepares final statements for the parties accounting for the disposition of all funds deposited in escrow (these are useful in the preparation of tax returns).
THE ESCROW HOLDER DOES NOT:
- offer legal advice;
- negotiate the transaction;
- offer investment advice.
Your local title company should be happy to provide additional information.
Article by CLTA
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