Mar
31
Third in a 4-part series. From the seller’s perspective, there are three main things that must be completed for his/her side of the closing to go smoothly. The most important thing is that the seller has to be able to deliver clear title to the buyer. For example, if there are any liens on the …
Mar
31
Second in a 4-part series. The buyer should be concerned with four main things that happen prior to and at closing. Primarily, the buyer has to be able to pay for the property. This means that the buyer must show up with the required down payment and that the mortgage loan must be ready. The …
Mar
31
First in a 4-part series. The closing of a real estate transaction is both an occurrence that happens at a point in time and the culmination of multiple processes that result in the ownership of the property passing from the seller to the buyer. The “occurrence” aspect is simple: the seller conveys title to the …
Mar
23
Simply stated, a point is a fee that you pay to your lender when you take out a mortgage. One point is equal to one percentage point of your loan value. For example, if your mortgage is for $150,000, then one point is $1,500 ($150,000 × 1%). Common examples of points are origination fees and …
Mar
23
An origination fee is an amount charged by a lender for granting a mortgage. This fee is usually expressed as a percentage of the loan amount. For example, if the loan amount is $300,000 and the origination fee is 0.5%, then the total fee is $1,500 ($300,000 × 0.5%).
Mar
23
When taking out a mortgage, a buydown point is an upfront fee or finance charge that you pay in exchange for getting a lower interest rate on the mortgage. For example, a lender may offer a $200,000 mortgage with an interest rate of 5% without any buydown points. In order to lower the interest rate …
Mar
21
Title insurance is a policy issued by a title insurance company to protect the policy holder from losses due to unknown title defects. Whereas other types of insurance typically insure against future events, title insurance protects the policy holder from things that have happened in the past. For example, auto insurance protects you when your car …
Mar
21
More properly referred to as a title insurance company, a title company issues title insurance to buyers and lenders in a real estate transaction. Through the process of issuing title insurance, title companies often coordinate many aspects of the closing of a real estate transaction. These aspects may include ordering property surveys; coordinating with the …
Mar
21
A mortgage is a loan in which the borrower (usually a home buyer) pledges the property as security for the payment of the loan. Because the property is the security for the loan, if the borrower fails to repay the mortgage as agreed–or otherwise defaults on the loan–the lender may take possession of the property …