Tag Archives: HUD

What Every REALTOR® Wants You to Know About the Government Shutdown


What Every REALTOR® Wants You to Know About the Government Shutdown

 Several years ago, I broke the little toe on my left foot.  Not a serious injury, I’m sure you’ll agree, but a break never the less.  As a REALTOR® and not a doctor, the state of Maryland recognizes me as an “expert” in the field of real estate, but not in the field of medicine.  Never the less, I believe I can say with confidence that my medical advice is to avoid breaking a toe (or anything for that matter).

As my doctor was wrapping my broken little toe to the toe next to it, he said, half chuckling, “You are about to find out how your body is all interconnected.”  As I tried to stand, walk, or even balance myself I realized how the toes – even the little toe – was used to maintain balance.  The partial government shutdown is no different.  The government agencies are all interconnected.

When the partial government shutdown was first announced, FHA announced that they would stop processing mortgage loans insured by the FHA.  A few days later, the FHA reversed their decision and announced that they would process loan applications, although they would only process loan applications for single family homes, and not for condos.

That may sound like good news, but in reality, when a person applies for a mortgage, their income is verified by checking their income from their tax records.  During the partial government shutdown, the IRS workers are not working, making the verification of the tax records difficult, if not impossible.

The FHA announced that if the government shutdown is “brief”, the FHA does not expect the housing market to be “…significantly affected.”  Then the FHA stated that most employees of the Department of Housing and Urban Development are furloughed and not working and that applications for loans will be delayed.  The definition of “brief” as used by the FHA was not provided.

If you are thinking of buying or selling, talk to a real estate professional – talk to a REALTOR® who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

Roland

 

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Title Insurance: Who Needs It


Title Insurance: Who Needs It

For most of us, buying a home is one of the largest financial transactions we will incur.  Unfortunately, all too often it is also one of the most misunderstood transactions we will be involved in.  Title insurance is no exception and in my opinion one of the – if not the – most important items a home buyer can purchase.

Title insurance is an insurance policy that protects the holder of the policy from any loss sustained by reason of defects in the title.  It does not guarantee that the title is free and clear, it only protects any financial loss due to an unclear title.

Unfortunately there are many, many items that can come up years after you have purchased some real estate that may result in an unclear title.  When a title search is conducted prior to closing it only indicates that there did not appear to be any defects on the title at that point in time and that it is “the opinion” of the person doing the search that it is free and clear.

Some examples of situations that can occur that would result in an unclear title, and that may not be available to a title search company would be:

  • Undisclosed heirs
  • Improperly disclosed legal documents
  • Failure to include necessary parties to certain judicial proceedings
  • Inadequate legal descriptions
  • Deeds and wills by persons lacking legal capacity
  • Errors in tax records

There are a multitude of items that could result in an unclear title.  It is important to remember that a title search only searches public records.  Items that have not been recorded on public records at that point in time are not searched, but may be recorded later resulting in an unclear title.

To complicate matters home buyers may notice an entry on the HUD-1 closing statement indicating that title insurance is being bought.  The title insurance most likely is a policy for the lender and not the home owner.  Line 1103 of the HUD-1 statement will indicate title insurance for the home owner.

I always suggest that buyers purchase the home owners title insurance.  It is a one-time expense and it provides coverage for the owners until the property is sold.  In addition, buying the policy at the time of the sale is significantly less expensive that buying it later because the title company only needs to complete one title search that they are already doing for the lender’s policy.

If you are thinking of buying or selling, talk to a REALTOR who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 615 417-8182 or email me at RolandLow1@gmail.com.

Roland

 

It’s a Buyers’ Market AND a Sellers’ Market!!


It’s a Buyers’ Market AND a Sellers’ Market!!

Several years ago when the real estate market was hot, it was undoubtedly a sellers’ market.  Homes could go on the market and sell within days or hours and with multiple bids.  When the real estate market crashed the market quickly turned to a buyers’ market – if the buyers’ could get a mortgage.

As the market continues to improve experts are predicting that the interest rates for mortgages will begin to climb.  A climb of approximately 1% is predicted by the end of this year.

Although the news media does not make much mention about it, the price of homes is climbing – April, 2012 showed a gain of 10.1% of home prices.  That is good news for the sellers, but there is also good news for buyers.

The good news is that mortgage rates have continued to drop to record lows of around 3.7%.

Here is how it is good news for sellers’ and buyers’ at this time.

Let’s assume that a year ago a seller had the home on the market for $200,000.  At that time, mortgage interest rates were running higher at around 4.5% – still a fantastic rate for a mortgage.  The principle and interest for a $200,000 home with an interest rate of 4.5% would result in a payment of $1,013.

Although the price of homes has climbed 10% the mortgage interest rate has dropped significantly.  Let’s assume that the home that was selling for $200,000 last year has now climbed to $220,000.  However, with the lower interest rate, the buyer would now have a principle and interest payment of $988.  (NOTE: For comparison purposes property taxes and insurance is not computed into these payments.)

The bad news for both sellers’ and buyers’ is that as the price of homes continues to climb and the interest rates edge upward, more and more buyers will be priced out of the market.

I also want to mention that although the news media talks about 20% down for purchasing a home, there are many mortgage products out there through HUD that only require as little as 3% down.

If you are thinking of buying or selling at this time or in the near future, talk to a real estate professional who can get you the information you need to make an informed decision.

As always, if I can help you with any of your real estate needs, please don’t hesitate to text or call me at 615 417-8182 or email me at RolandLow1@gmail.com

Roland