In a Nutshell: Property in America is a BIG deal. Knowing exactly who owns it, if anyone else has a hold on a piece of it, and who has rights to play on the property, is an equally BIG deal. Here is the peace of mind you are paying for with title insurance: The seller you are buying from is actually the seller. The seller will own the property outright (clear) by the time it is transferred over to you. If someone ever legally put a lien (a right to possession until a debt is paid in full) on the property and the seller didn't tell you about it when you bought it, and the person that placed that lien on the property wants their money at the time when you own the property, the title company will handle it and you can sleep good at night! For all these things, the seller pays for the policy which insures you (owner’s policy), and you pay for the policy which covers the lender (because they have a loan amount interest in the property as well). The policies are paid at closing,...
You may understand that a down payment is typically required to purchase a home, but it is also important to set expectations for closing costs as well. Closing costs help pay to set up the loan, many of the costs are the same at most institutions, and these costs can be paid for in a few different ways. In a nutshell: It is part of your responsibility as a homebuyer to understand closing costs. Closing costs are what you pay to close on a home purchase, set up your mortgage, and fill your escrow account. You should expect closing costs to be between 2% and 3% of the purchase price. Sometimes a seller can contribute to cover part, or all of these costs, however even less known is that your lender can potentially give you credits towards closing costs for taking a higher interest rate. Definition The term closing costs can cover a few things, however my definition is: the total upfront costs of a home mortgage. Closing costs in this article are n...
When considering a new mortgage, it only makes sense that you review the same credit report that the bank/lender will use once you apply. There are three main credit reporting agencies which the majority of home lenders pull credit from when you apply for a mortgage, both when buying and refinancing. FICO® scores based on reports may vary between the three, but your middle score of the three is typically used when qualifying for a mortgage. The term FICO® scores and Credit Reports are interesting, read on if your curiosity is strong right now, or skip to the next section to continue. FICO (Fair Isaac Corporation) was founded in 1956 by an engineer and mathematician. At this time credit cards were gaining popularity, and the credit limit to offer somebody became increasingly difficult to determine, especially if the one applying was in a different geographical region. Think about this, befor...
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