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Title Insurance: As a homebuyer, the term is probably familiar - but is it understood? What is your dollar actually paying for when you purchase a title policy?
Title Insurers, unlike property or casualty insurance companies, operate under the theory of risk elimination. Title companies spend a high percentage of their operating income each year collecting, storing, maintaining and analyzing official records for information that affects title to real property. Their technical experts are trained to identify the rights others may have in your property, such as recorded liens, legal actions, disputed interests, rights of way or other encumbrances on your title. Before closing your transaction, the title company will proceed to clear those encumbrances which you do not wish to assume.
This theory is different from that of most other insurance where, for example, rates and anticipated losses are based on actuarial studies and premiums are pooled on the assumption that a certain number of claims will be made. The distinction is important: title insurance premiums are paid to identify and eliminate potential risks and claims before they happen. Medical and casualty insurance premiums, for example, are paid to insure against an unpredictable future event, knowing that risks exist and claims will occur. Furthermore, title insurance involves a one-time premium, paid when you close the real estate transaction, while property, casualty and medical insurance require regular renewal premiums.
The goal of title companies is to conduct such a thorough search and evaluation of public records that no claims will ever arise. Of course, this is impossible -- we live in an imperfect world, where human error and changing legal interpretations make 100% risk elimination impossible. When claims arise, professional claims personnel are assigned to handle them according to the terms of the title insurance policy.
As in all competitive business environments, rates vary from company to company, so you should make comparisons before deciding on a particular title company. Your real estate professional can help you do this. In addition, there are many helpful customer services provided by title companies which you and your real estate professional may find helpful to your transaction.
The issuance of a title insurance policy is highly labor-intensive. It is based upon the maintenance of a title plant, or library of title records, in many cases dating back over a hundred years. Each day, recorded documents affecting real property and property owners are posted to these title plants so that when a title search on a particular parcel is requested, the information is already organized for rapid and accurate retrieval. This investment in skilled personnel and advanced data processing represents a major part of the title insurance premium dollar.
Article by CLTA

Title Insurance - Where Does Your Dollar Go?

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Wow what a year, and it's only March.&nbsp; Austin home sales so far for the year are off to an impressive start.&nbsp; The market just can't supply enough homes for the demand.&nbsp; Buyers are continuing the trend of relocation to the Austin metro area at a rate over nearly 200 a day!&nbsp; Yes, a day!&nbsp; Builders can develop and build fast enough and with COVID still a concern for many, sellers are holding off selling unless you just have to.&nbsp; This has created the very strong market we see today here in Austin.
To help make since of it all, lets chat about your plans to buy, sell, lease or invest today.&nbsp; Don't forget we serve Austin, Highland lakes, and our TX coasts in Corpus Christi and Port Aransas.&nbsp;&nbsp;
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February Austin sales numbers

As we roll into 2020, many of my clients have been asking me how the market did last year.&nbsp; Afterall we were up against a global pandemic, numerous shut downs, and other challenges we all had to deal with.&nbsp;&nbsp;
As you will see in the graph below we definitely felt the effects of the virus starting in April.&nbsp; However by June the market had begun it's recovery and never stopped.&nbsp; We ended the year with sales up double digits compared to the year prior!&nbsp; A few things at play here.&nbsp; One, our lives really changed and changed quickly.&nbsp; Working and schooling from home changed the way we use our homes and the spaces we need.&nbsp; Two, interest rates remain at all time lows, dipping even below 2 percent for some.&nbsp; Three, Austin continues to grow, faster now than ever before.&nbsp; We simply don't have enough&nbsp;homes for everyone here.&nbsp;&nbsp;
This trend looks to continue into 2021.&nbsp; Sales are off to very strong start with homes all over the city and price ranges receiving multiple offers.&nbsp; If you're thinking about selling, I can't imagine a better time.&nbsp; If you're thinking about buying, now is also a great time due to low interest rates, and more and more inventory coming on the market as we inch our way to spring.&nbsp; Either way, myself and team are all here to help guide you through the process and create the best stress-free experience for you.&nbsp; Let's chat about your plans today!

2020 Austin stats WOW! Push the marker higher in early 2021

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If you know exactly why you are selling then it is easier for you to follow the right plan of action for getting what you want.
If you are a seller who needs to close a sale as quickly as possible, then you should know that getting the highest price possible is not one of your priorities. It does not mean that you won&rsquo;t or cannot get the highest price, but it means that the price is not the deciding factor. A buyer who can give you a quick closing time will appeal much more to you than a buyer who can offer you more money but the negotiation and closing time drag on.
It&rsquo;s always good to know how low you will go in terms of selling price. This will help to eliminate some of the offers that you find simply offensive or ridiculous. Even though you should consider all offers seriously and take into consideration the terms of each offer, sometimes, if you know the bottom line and are strict about it, you can save yourself time.
Once you know what your limits and reasons are, discuss them with your agent so that they can help you set your goals realistically. If you decide to list your home on your own, make sure you do research on the current market, and you get the proper advice you need in terms of legal issues, etc. The key is to be realistic and to know what your goals are so they can be met.

Know Why You are Selling

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<h1>Biggest news in Austin and local area Real Estate</h1>
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<a href="https://www.bizjournals.com/austin/news/2018/11/09/high-priced-homes-austin-gets-its-first-1-million.html" target="_blank" rel="noopener">Austin gets it's first Million Dollar Neighborhood</a>
<a href="https://www.bizjournals.com/austin/news/2018/11/01/organization-finds-a-home-for-underrepresented.html" target="_blank" rel="noopener">Boys and Girls Clubs of Austin get new Home Club facility</a>
<a href="https://www.bizjournals.com/austin/news/2018/11/09/report-wework-may-build-its-own-tower-in-downtown.html" target="_blank" rel="noopener">WeWork may build it's own office tower downtown on prime site.</a>
<a href="http://austin.culturemap.com/news/restaurants-bars/11-09-18-austin-restaurants-open-Thanksgiving-matties-second-bar-ciclo-carillon/" target="_blank" rel="noopener">Leave THANKSGIVING to the pros, these Austin area restaurants are OPEN turkey day.</a>
<a href="http://austin.culturemap.com/news/city-life/11-08-18-austin-awarded-medal-as-best-us-outpost-for-military-veterans/" target="_blank" rel="noopener">Austin slated as BEST PLACE for Military Veterans to live</a>
<a href="http://austin.culturemap.com/news/city-life/11-08-18-austins-oldest-hike-and-bike-trail-charts-new-course-from-downtown-to-the-domain-shoal-creek-trail-plan/#slide=1" target="_blank" rel="noopener">Austin's oldest Hike and Bike trail sets new path from Downtown to Domain.</a>
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Happy Thanksgiving Ausitn

How Much is your home worth in Austin, Texas? &nbsp;If you are planning on selling your home, that is a question you need answered. &nbsp;As your Local Austin&nbsp;Real Estate Expert, I can help you to learn the answer to that question. &nbsp;I will personally do the research on your behalf and provide you with a detailed Free Market Analysis. &nbsp;Please feel free to take a few moments to complete the basic information below and I will go straight to work for you. &nbsp;Or, if you prefer, please feel free to give me a call directly at 512-653-0488.
See:&nbsp;<a href="https://www.greggsteam.com/map-search">Homes for Sale in Austin, Texas</a>
FOR A COMPLETE MARKET ANALYSIS FORM:&nbsp;<a href="https://www.greggsteam.com/free-market-analysis">CLICK HERE (link to Free Market Analysis)</a> IMAGE OF A HOME

How Much Is My Home Worth in Austin, Texas

Plan to buy or sell a home soon?&nbsp; Find out why in my over 20 years of selling homes I think you should sooner rather than later in our Fall / Winter Home buying or selling reports.
The evidence is the clearest it's been in decades.&nbsp; Wait, and you'll end up paying more, here's why......
&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; SELLING GUIDE&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;BUYING GUIDE
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Selling Guide
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Buying Guide
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Buying or Selling soon

Have you ever considered moving to beautiful Austin, Texas? &nbsp;Austin is a desirable community &amp; great location. &nbsp;Austin, Texas&nbsp;boasts a variety of local landmarks, excellent schools, parks and much much more. &nbsp;Take a look at some of the most popular searches in Austin, Texas&nbsp;and the surrounding areas.
See:&nbsp;<a href="https://www.greggsteam.com/map-search">Homes for Sale in Austin, Texas</a>
Not quite the location that you are looking for? &nbsp;That is okay. &nbsp;Through my website you can search for the exact home you are looking for in the exact city, county or community you are looking for. &nbsp;Search for your perfect home, in the perfect location by taking advantage of my&nbsp;<a href="https://www.greggsteam.com/advanced-search">Advanced Search</a>&nbsp;tool built directly into this website.

Have You Ever Considered Purchasing a Home in Austin, Texas

There are so many different kinds of homes out there for families to choose from. &nbsp;Do I want to live in Austin? &nbsp;Or maybe you want to find a home in Austin. &nbsp;How many bedrooms and bathrooms do you need? &nbsp;Do you need a large back yard? &nbsp;A small backyard? &nbsp;Do I even need, or want, a yard at all? &nbsp;Don&rsquo;t even get me started on the front yard and curb appeal. &nbsp;Hardwood floors, tile, carpet. &nbsp;There are so many things to consider when looking for your dream home. &nbsp;How, then, do you find the right home for you?
The answer is to put me to work for you. &nbsp;That is what I do for my clients. &nbsp;Completing my basic&nbsp;<a href="https://www.greggsteam.com/dream-home-finder">Dream Home Finder</a>&nbsp;I can immediately go to work for you. &nbsp;Of course you can take advantage of my&nbsp;<a href="https://www.greggsteam.com/quick-search">Quick Search</a>&nbsp;and my&nbsp;<a href="https://www.greggsteam.com/advanced-search">Advanced Search</a>&nbsp;tools to surf through all the homes for sale in Austin, Texas&nbsp;or the surrounding areas. &nbsp;By completing the Dream Home Finder, I can use additional resources at my disposal to locate homes for sale that may not be available in the public view. &nbsp;In addition you are a busy individual and my passion is to work for you to find that dream home and schedule tours for you. &nbsp;By working together as a team with your dreams and my resources, finding that dream home is only one tour away. &nbsp;It is my passion to find you that one right tour.

Find Your Dream Home in Austin, Texas

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An adjustable rate mortgage (ARM) has an interest rate that fluctuates periodically. This is in contrast to a fixed rate mortgage, which always has the same interest rate.
Every ARM has basic components:
<ol>
<li>An index</li>
<li>A margin</li>
<li>Adjustment Period</li>
<li>An interest rate cap</li>
<li>An initial interest rate</li>
</ol>
<h2>The Index</h2>
An ARM&rsquo;s interest rate is tied to one of many economic indices, some examples of which are the 1-year constant maturity Treasury security, the Cost of Funds Index, or the London Interbank Offered Rate. Different indices move at different rates so know the characteristics of the index used for your ARM.
<h2>The Margin</h2>
The interest rate for your ARM will be calculated by adding a margin to the interest rate from the index. The margin is basically the markup charged by the lender that allows them to make a profit off of your loan, such as adding 2% to the index, where the 2% is the margin. The margin of your loan usually does not fluctuate.
<h2>The Adjustment Period</h2>
The Adjustment Period controls when and how often your interest rate changes. For example, if your ARM has an adjustment period of 1 year, your interest rate will be subject to change at the end of each year and your monthly mortgage payment will be recalculated to reflect this change.
<h2>The Interest Rate Cap</h2>
Interest rate caps are built into the loan to protect the borrower from drastic interest rate fluctuations. The caps limit how much the interest rate or monthly payment can change at the end of each adjustment period. An ARM can also have a cap for the life of the loan. For example, during the life of a loan, the interest rate can only be increased by 5%.
<h2>The Initial Interest Rate</h2>
The Initial Interest Rate is the interest rate that you start with at the beginning of your loan period. The length of time your loan stays at this rate is built into the loan. For example, you may stay at the initial interest rate for 1 year, 5 years, or another length of time depending on your specific mortgage. This type of ARM is generally referred to as a Hybrid ARM. The initial interest rate for an adjustable rate mortgage is generally lower than that of a fixed rate mortgage.

Adjustable Rate Mortgages - The Basics

<img src="https://storage.googleapis.com/library-gs.ihouseprd.com/blog/adjustable-rate-mortgage.jpg" border="0" width="1000" />
Now that you know what an ARM is and how it works, you may be wondering what the advantages and disadvantages are. So let&rsquo;s explore that issue.
Offering adjustable rates allows lenders to transfer part of the interest rate risk from themselves to the borrower. If you get a fixed rate mortgage and the interest rate then goes up, it costs the lender money. However, if you have an adjustable rate mortgage, as the interest rate goes up, so does your payment, thus compensating the lender. Adjustable rate mortgages are particularly useful when unpredictable interest rates make fixed rate loans hard to get.
One of the main advantages of an adjustable rate mortgage is that the initial interest rate is lower than that of a fixed rate mortgage. A lower rate means lower payments, which may help you qualify for a larger loan. This is an important detail if you expect your future earnings to rise. In this case, the ARM will allow you to qualify for a larger loan amount earlier rather than later.
However, this information should only be used with care. If you use an ARM to qualify for a larger loan amount than a fixed rate would allow you and the interest rate then rises drastically or your income doesn&rsquo;t rise, you may not be able to afford the larger monthly payments, thus causing you to default on your loan.
A situation in which an adjustable rate mortgage makes sense would be if you are only going to keep the house for a short period of time. If you are only planning to own your house for only a few years, the risk of the interest rate rising goes down. This means that you will get a better rate with an ARM, making it a good choice. However, if you plan on staying in your home for a long period of time, a fixed rate may be a better option.
The lesson here is to have a plan. Know what your goals are in purchasing a home and plan for all eventualities. Do your research when shopping for an ARM and consider the worst-case scenario.

Adjustable Rate Mortgages - The PROS & CONS

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By asking the right questions, and knowing exactly what your needs are, you can find the right loan for you. There are certain approaches that you can take while mortgage shopping that can cost or save you money.
It is still true that the better qualifications you have, the lower your interest rate will be. However, there are mortgages available for almost everyone; it's the interest rates or the down payments that vary.
Before speaking with a lender, know what monthly dollar amount you feel comfortable committing to. Then when you discuss mortgage pre-approval with your lender, it is easier for you to determine the monthly amount and what value of home the monthly amount translates into. Do not put yourself in the position where you will be paying more each month than you intended simply because the dream home requires it.
Do your research on the types of mortgages available to you and find the one that best suits your needs. There are a number of considerations to be made in terms of finding the best mortgage for each individual:
<ul>
<li>What type of market are you in? Are the interest rates falling or rising?</li>
<li>Do you want a fixed mortgage rate, where you will always know what your payment is going to be?</li>
<li>What are your long-term goals? Do you intend to resell the property? Do you only need the mortgage for a short time?</li>
</ul>

Avoiding Financial Stress

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Buying a home will probably rank as one of the biggest personal investments one can make. Being organized and in control will contribute significantly to getting the best home deal possible with the least amount of stress. It&rsquo;s important to anticipate the steps required to successfully achieve your housing goal and to build a plan of action that gets you there.
Before you can build a plan of action, take the time to lay the groundwork for your decision-making process.
First, ask yourself how much you can afford to pay for a home. If you&rsquo;re not sure on the price range, find a lender and get pre-approved. Pre-approval will let you know how much you can afford, allowing you to look for homes in your price range. Getting pre-approved also helps you to alleviate some of the anxieties that come with home buying. You know exactly what you qualify for and at what rate, you know how large your monthly mortgage payments will be, and you know how much you will have for a down payment. Once you are pre-approved, you avoid the frustration of finding homes that you think are perfect, but are not in your price range.
Second, ask yourself where you want to live and what the best location for you and/or your family is. Things to consider:
<ul>
<li>convenience for all family members</li>
<li>proximity to work, school</li>
<li>crime rate of neighborhood</li>
<li>local transportation</li>
<li>types of homes in neighborhood, for example condos, town homes, co-ops, newly constructed homes etc.</li>
</ul>

Build a Plan of Action and Get Ready

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It&rsquo;s the big day.
The day you go to the title or escrow company, sign your name on the dotted line, hand over a check and prepare to take ownership of your new home.
It&rsquo;s also the day that you and the seller will pay &ldquo;closing&rdquo; or settlement costs, an accumulation of separate charges paid to different entities for the professional services associated with the buying and selling of real property.
It&rsquo;s too often a day filled with uncertainty and stress.
To help you better understand this confusing subject, the Land Title Association has answered some of the questions most commonly asked about title, closing and closing costs.
<h3>What services will I be paying for when I pay closing costs?</h3>
You will usually be paying for such things as real estate commissions, appraisal fees, loan fees, escrow charges, advance payments such as property taxes and homeowner&rsquo;s insurance, title insurance premiums, pest inspections and the like.
<h3>How much should I expect to pay in closing costs?</h3>
The amount you pay for closing costs will vary; however, when buying your home and obtaining a new loan, an estimate of your closing costs will be provided to you pursuant to the Real Estate Settlement Procedures Act after you submit your loan application. This disclosure provides you with a good faith estimate of what your closing costs will be in the real estate process. An itemized list of charges will be prepared when you close your transaction and take title to your new property.
<h3>Can I pay for my closing costs in installments?</h3>
No, and it is easy to understand why. Many different parties will have fulfilled their responsibilities and be awaiting payment upon closing. The title or escrow company will disburse money to those parties, pursuant to the escrow instructions, when funds are available.
<h3>Will I be allowed to write a personal check to cover my closing cost?</h3>
Your closing funds should be in the form of a cashier&rsquo;s check, issued by an institution from the state of your purchase, made payable to the title company or escrow office in the amount requested. A personal check may delay the closing or may be unacceptable to the title or escrow company. An out-of-state check could also cause a delay in your closing due to possible delays in clearing the check.
<h3>How much can I expect to pay for Title Insurance?</h3>
This point is often misunderstood. Although the title company or escrow office usually serves as a meeting ground for closing the sale, only a small percentage of total closing fees are actually for title insurance protection.
Your title insurance premium may actually amount to less than one percent of the purchase price of your home, and less than ten percent of your total closing costs. The title policy is good for as long as you and your heirs own the property with the payment of only one premium.
<h3>Why are separate owner&rsquo;s and lender&rsquo;s title insurance policies issued?</h3>
Both you and your lender will want the security offered by title insurance.
Your home is an important purchase, and you will want to be certain your home is yours, all yours. Title insurance companies insure your rights and interests in order to protect you against claims.
Your lender is looking to insure the enforceability of their lien on your property and marketability. What is meant by &ldquo;marketability&rdquo;? Local lenders will originate a loan here, and, often, sell it to an out-of-state investor. This investor, who may never see the property, needs to know that he has a valid and enforceable lien. Title insurance is the way of making certain. Without a current title policy, the loan is essentially unmarketable.
<h3>What does my Title dollar pay for?</h3>
Title insurers, unlike property or casualty insurance companies, operate under the theory of risk elimination.
Risk elimination can only be accomplished after an intensive period of risk identification.
Title companies spend a high percentage of their operating revenue each year collecting, storing, maintaining and analyzing official records for information that affects title to real property. The issuance of a title insurance policy is highly labor-intensive. It is based upon the maintenance of a title &ldquo;plant&rdquo; or library of title records, in many cases dating back over a hundred years. Each day, recorded documents affecting real property are posted to these plants so that when a title search on a particular parcel is requested, the information is already organized for rapid and accurate retrieval.
Trained title experts are able, with the aid of their extensive title plants, to identify the rights others may have in your property, such as recorded liens, legal actions, disputed interests, rights of way or other encumbrances on your title. Before closing your transaction, you can seek to clear those encumbrances which you do not wish to assume.
The goal of title companies is to conduct such a thorough search and evaluation of public records that no claims will ever arise. Of course, this is impossible--we live in an imperfect world, where human error and changing legal interpretations make 100 percent risk elimination impossible. When claims do arise, title insurance companies have professional claims personnel to make sure that your property rights are protected pursuant to the terms of your policy.
To conclude, when you pay for your title insurance policy, you are paying for a team of professionals who have worked together to deliver you a title insurance policy which represents protection for your ownership of real property.
<h3>Who can I look for straight answers on Title, Closing, and closing costs?</h3>
Title or escrow company personnel are available to review and explain your title policy and your closing statement.
Article by CLTA

Closing and Title Costs

<img src="https://storage.googleapis.com/library-gs.ihouseprd.com/blog/counting-money.jpg" border="0" />
This is a detailed summary of costs you may have to pay when you buy or refinance your home. They are listed in the order that they should appear on a Good Faith Estimate you obtain from a mortgage lender. There are two broad categories of closing costs. Non-recurring closing costs are items that are paid once and you never pay again. Recurring closing costs are items you pay time and again over the course of home ownership, such as property taxes and homeowner&rsquo;s insurance. Some of the items that appear here do not traditionally appear on a lender&rsquo;s Good Faith Estimate and lenders are not required to show all of these items.
<h2>Non-Recurring Closing Costs Associated with the Lender.</h2>
Loan Origination Fee -&nbsp;The loan origination fee is often referred to as points. One point is equal to one percent of the mortgage loan. As a rule, if you are willing to pay more in points, you will get a lower interest rate. On a VA or FHA loan, the loan origination fee is one point. Any additional points are called discount points.
Loan Discount -&nbsp;On a government loan, the loan origination fee is normally listed as one point or one percent of the loan. Any points in addition to the loan origination fee are called discount points. On a conventional loan, discount points are usually lumped in with the loan origination fee.
Appraisal Fee -&nbsp;Since your property serves as collateral for the mortgage, lenders want to be reasonably certain of the value and they require an appraisal. The appraisal looks to determine if the price you are paying for the home is justified by recent sales of comparable properties. The appraisal fee varies, depending on the value of the home and the difficulty involved in justifying value. Unique and more expensive homes usually have a higher appraisal fee. Appraisal fees on VA loans are higher than on conventional loans.
Credit Report -&nbsp;As part of the underwriting review, your mortgage lender will want to review your credit history. The cost of running the credit report can vary and is included in closing costs.
Lender&rsquo;s Inspection Fee -&nbsp;You normally find this fee on new construction and is associated with what is called a 442 Inspection. Since the property is not finished when the initial appraisal is done, the 442 Inspection is done when the building is completed and verifies that construction is complete with carpeting and flooring installed.
Mortgage Broker Fee -&nbsp;About seventy percent of loans are originated through mortgage brokers and they will sometimes list your points in this area instead of the Loan Origination Fee category. They may also add any broker processing fees in this area so you clearly understand how much is being charged by the wholesale lender and how much is being charged by the broker. Wholesale lenders offer lower costs/rates to mortgage brokers than you can obtain directly, so you are not paying extra by going through a mortgage broker.
Tax Service Fee -&nbsp;During the life of your loan you will be making property tax payments, either on your own or through your impound account with the lender. Since property tax liens can sometimes take precedence over a first mortgage, it is in your lender&rsquo;s interest to pay an independent service to monitor property tax payments.
Flood Certification Fee -&nbsp;Your lender must determine whether or not your property is located in a federally designated flood zone. This is a fee usually charged by an independent service to make that determination.
Flood Monitoring -&nbsp;From time to time flood zones are re-mapped. Some lenders charge this fee to maintain monitoring on whether this re-mapping affects your property.
<h2>Other Lender Fees</h2>
We put these in a separate category because they vary so much from lender to lender and cannot be associated directly with a cost of the loan. These fees generate income for the lenders and are used to offset the fixed costs of loan origination. The Processing Fee mentioned above can also fall into this category, but since it is listed higher on the Good Faith Estimate Form we did not also include it here. You will normally find some combination of these fees on your Good Faith Estimate.
Document Preparation -&nbsp;Before computers made it fairly easy for lenders to draw their own loan documents, they used to hire specialized document preparation firms for this function. This was the fee charged by those companies. Nowadays, lenders draw their own documents but this fee is charged on almost all loans.
Underwriting Fee -&nbsp;Once again, it is difficult to determine the exact cost of underwriting a loan since the underwriter is usually a paid staff member.
Administration Fee -&nbsp;If an Administration Fee is charged, you will probably find there is no Underwriting Fee. This is not always the case.
Appraisal Review Fee -&nbsp;Even though you will probably not see this fee on your Good Faith Estimate, it is charged occasionally. Some lenders routinely review appraisals as a quality control procedure, especially on higher valued properties.
Warehousing Fee -&nbsp;This is rarely charged and begins to border on the ridiculous. However, some lenders have a warehouse line of credit and add this as a charge to the borrower.
<h2>Items Required to be Paid in Advance</h2>
Pre-paid Interest -&nbsp;Mortgage loans are usually due on the first of each month. Since loans can close on any day, a certain amount of interest must be paid at closing to get the interest paid up to the first. For example, if you close on the twentieth, you will pay ten days of pre-paid interest.
Homeowner&rsquo;s Insurance -&nbsp;This is the insurance you pay to cover possible damages to your home and other items. If you buy a home, you will normally pay the first year&rsquo;s insurance when you close the transaction. If you are buying a condominium, your Homeowners&rsquo; Association Fees normally cover this insurance.
VA Funding Fee -&nbsp;On VA loans, the Veterans Administration charges a fee for guaranteeing your loan. The fee will be a percentage of the loan balance but the exact percentage will vary depending on whether you have used your VA eligibility in the past. Instead of actually paying this as an out-of-pocket expense, most veterans choose to finance it, so it gets added to the loan balance. This is why the loan balance on VA loans can be higher than the actual purchase amount.
Up Front Mortgage Insurance Premium (UFMIP) -&nbsp;This is charged on FHA purchases of single-family residences (SFR&rsquo;s) or Planned Unit Developments (PUDs). Like the VA Funding Fee it is normally added to the balance of the loan. Unlike a VA loan, the homebuyer must also pay a monthly mortgage insurance fee, too. This is why many lenders do not recommend FHA loans if the homebuyer can qualify for a conventional loan. Condominium purchases do not require the UFMIP.
Mortgage Insurance -&nbsp;Though it is rare nowadays, some first-time homebuyer programs still require the first year mortgage insurance premium to be paid in advance. Most mortgage insurance (when required) is simply paid monthly along with your mortgage payment. Mortgage insurance covers the lender and covers a portion of the losses in those cases where borrowers default on their loans.
<h2>Reserves Deposited with Lender</h2>
If you make a minimum down payment, you may be required to deposit funds into an impound account. Funds in this account are your funds, and the lender uses them to make the payments on your homeowner&rsquo;s insurance, property taxes, and mortgage insurance (whichever is applicable). Each month, in addition to your mortgage payment, you provide additional funds which are deposited into your impound account.
The lender&rsquo;s goal is to always have sufficient funds to pay your bills as they come due. Sometimes impound accounts are not required, but borrowers request one voluntarily. A few lenders even offer to reduce your loan origination fee if you obtain an impound account. However, if you are disciplined about paying your bills and an impound account is not required, you can probably earn a better rate of return by putting the funds into a savings account. Impound accounts are sometimes referred to as escrow accounts.
Homeowners Insurance Impounds -&nbsp;your lender will divide your annual premium by twelve to come up with an estimated monthly amount for you to pay into your impound account. Since a lender is allowed to keep two months of reserves in your account, you will have to deposit two months into the impound account to start it up.
Property Tax Impounds -&nbsp;How much you will have to deposit towards taxes to start up your impound account varies according to when you close your real estate transaction. For example, you may close in November and property taxes are due in December. Your deposit would be higher than for someone closing in May.
Mortgage Insurance Impounds -&nbsp;When required, most lenders allow this to simply be paid monthly. However, you may be required to put two months&rsquo; worth of mortgage insurance as an initial deposit into your impound account.
<h2>Non-Recurring Closing Costs not associated with the Lender</h2>
Closing/Escrow/Settlement Fee -&nbsp;Methods of closing a real estate transaction vary from state to state, as do the fees.
Title Insurance -&nbsp;Title Insurance assures the homeowner that they have clear title to the property. The lender also requires it to insure that their new mortgage loan will be in first position. The costs vary depending on whether you are purchasing a home or refinancing.
Notary Fees -&nbsp;Most sets of loan documents have two or three forms that must be notarized. Usually your settlement or escrow agent will arrange for you to sign these forms at their office and will charge a notary fee.
Recording Fees -&nbsp;Certain documents get recorded with your local county recorder. Fees vary regionally.
Pest Inspection -&nbsp;This is also referred to as a Termite Inspection. This inspection tests not only for pest infestations, but also other items such as wood rot and water damage. If repairs are required, the amount to cover those repairs can vary. The seller will usually pay for the most serious repairs, but this is a negotiable item. Usually (not always) the pest inspection fee is paid by the seller of the home and is not normally reflected on the Good Faith Estimate.
Home Inspection -&nbsp;Since it is the homebuyer&rsquo;s choice to obtain a home inspection or not, this cost is not usually reflected on a Good Faith Estimate. However, it is recommended. Keep in mind that the home inspector has a certain set of standards he uses when inspecting a home, and those standards may be higher than required by local building codes. An example is that an inspector may note there is no spark arrestor on a chimney but the local building code may not require it. This sometimes leads to conflicts between buyer and seller.
Home Warranty -&nbsp;This is also an optional item and not normally included on the Good Faith Estimate. A Home Warranty usually covers such items as the major appliances, should they break down within a specific time. Often this is paid by the seller.
<h2>Refinancing Associated Costs (but not charged by the new Lender)</h2>
Interest -&nbsp;When you close the transaction on your refinance, there will most likely be some outstanding interest due on the old loan. For example, if you close on August twentieth (and you made your last payment), you will have twenty days interest due on the old loan and ten days prepaid interest on the new loan. Your first payment on the new loan would not be until October 1st since you have already paid all of August&rsquo;s interest when you closed the refinance transaction (since interest is paid in arrears, a September payment would have paid August&rsquo;s interest, which has already been paid in closing).
Reconveyance Fee -&nbsp;This fee is charged by your existing lender when they &ldquo;reconvey&rdquo; their collateral interest in your property back to you through recording of a Reconveyance.
Demand Fee -&nbsp;Your existing lender may charge a fee for calculating payoff figures.
Sub-Escrow fee -&nbsp;Though it sounds like an escrow fee, this fee is actually charged by the Title Company. Assume it is an income-generating fee similar to some of the lender fees mentioned above.
Loan Tie-in Fee -&nbsp;Though it sounds like a lender fee, this cost is actually charged by the Escrow Company.
Homeowner&rsquo;s Association Transfer Fee -&nbsp;If you are buying a condominium or a home with a Homeowner&rsquo;s Association, the association often charges a fee to transfer all of their ownership documents to you.
<h2>Asking the Seller to Pay Closing Costs - Rules and Advice.</h2>
It has become common to ask the seller to pay some or all of the closing costs when you purchase a home. Essentially, this is financing your closing costs since you will probably pay a little bit more for the property than you would if you were paying your own costs.
Keep in mind a few simple rules. On conventional loans you can only ask the seller to pay non-recurring costs, not prepaid fees or items to be paid in advance. If you are putting ten percent down or more, the most the seller can contribute is six percent of the purchase price. If you are putting less down, the most the seller can contribute is three percent.
On VA loans, you can ask the seller to pay everything. This is called a &ldquo;VA No-No&rdquo;, meaning the buyer is making no down payment and paying no closing costs.
On FHA loans, the seller can pay almost any cost, but the buyer has to have a minimum three percent investment in the home/closing costs.
Most refinances include the closing costs and prepaids in the new loan amount, requiring little or no out-of-pocket expenses to close the deal.
If you didn&rsquo;t get bored as you read through this, now you know everything (almost) about closing costs.

Closing Costs When Buying or Refinancing a Home

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How Should I Take Ownership of the Property I am Buying?
Real property can be incredibly valuable and the question of how parties can take ownership of their property is important. The form of ownership taken -- the vesting of title -- will determine who may sign various documents involving the property and future rights of the parties to the transaction. These rights involve such matters as: real property taxes, income taxes, inheritance and gift taxes, transferability of title and exposure to creditor&rsquo;s claims. Also, how title is vested can have significant probate implications in the event of death.
The Land Title Association (LTA) advises those purchasing real property to give careful consideration to the manner in which title will be held. Buyers may wish to consult legal counsel to determine the most advantageous form of ownership for their particular situation, especially in cases of multiple owners of a single property.
The LTA has provided the following definitions of common vesting as an informational overview. Consumers should not rely on these as legal definitions. The Association urges real property purchasers to carefully consider their titling decision prior to closing, and to seek counsel should they be unfamiliar with the most suitable ownership choice for their particular situation.
Common Methods of Holding Title
<h3>SOLE OWNERSHIP</h3>
Sole ownership may be described as ownership by an individual or other entity capable of acquiring title. Examples of common vesting in cases of sole ownership are:
<ol>
<li>A Single Man/Woman:
A man or woman who has not been legally married. For example: Bruce Buyer, a single man.
</li>
<li>An Unmarried Man/Woman:
A man or woman who was previously married and is now legally divorced. For example: Sally Seller, an unmarried woman.
</li>
<li>A Married Man/Woman as His/Her Sole and Separate Property:
A married man or woman who wishes to acquire title in his or her name alone.
The title company insuring title will require the spouse of the married man or woman acquiring title to specifically disclaim or relinquish his or her right, title and interest to the property. This establishes that it is the desire of both spouses that title to the property be granted to one spouse as that spouse&rsquo;s sole and separate property. For example: Bruce Buyer, a married man, as his sole and separate property.
</li>
</ol>
<h3>CO-OWNERSHIP</h3>
Title to property owned by two or more persons may be vested in the following forms:
<ol>
<li>Community Property:
A form of vesting title to property owned by husband and wife during their marriage, which they intend to own together. Community property is distinguished from separate property, which is property acquired before marriage, by separate gift or bequest, after legal separation, or which is agreed to be owned only by one spouse.
Real property conveyed to a married man or woman is presumed to be community property, unless otherwise stated. Since all such property is owned equally, husband and wife must sign all agreements and documents of transfer. Under community property, either spouse has the right to dispose of one half of the community property, including transfers by will. For example: Bruce Buyer and Barbara Buyer, husband and wife as community property.
</li>
<li>Joint Tenancy
A form of vesting title to property owned by two or more persons, who may or may not be married, in equal interest, subject to the right of survivorship in the surviving joint tenant(s). Title must have been acquired at the same time, by the same conveyance, and the document must expressly declare the intention to create a joint tenancy estate. When a joint tenant dies, title to the property is automatically conveyed by operation of law to the surviving joint tenant(s). Therefore, joint tenancy property is not subject to disposition by will. For example: Bruce Buyer and Barbara Buyer, husband and wife as joint tenants.
</li>
<li>Tenancy in Common:
A form of vesting title to property owned by any two or more individuals in undivided fractional interests. These fractional interests may be unequal in quantity or duration and may arise at different times. Each tenant in common owns a share of the property, is entitled to a comparable portion of the income from the property and must bear an equivalent share of expenses. Each co-tenant may sell, lease or will to his/her heir that share of the property belonging to him/her. For example: Bruce Buyer, a single man, as to an undivided 3/4 interest and Penny Purchaser, a single woman, as to an undivided 1/4 interest, as tenants in common.
</li>
</ol>
Other ways of vesting title include:
<ol>
<li>A Corporation*:
A corporation is a legal entity, created under state law, consisting of one or more shareholders but regarded under law as having an existence and personality separate from such shareholders.
</li>
<li>A Partnership*:
A partnership is an association of two or more persons who can carry on business for profit as co-owners, as governed by the Uniform Partnership Act. A partnership may hold title to real property in the name of the partnership.
</li>
<li>As Trustees of A Trust*:
A trust is an arrangement whereby legal title to a property is transferred by the grantor to a person called a trustee, to be held and managed by that person for the benefit of the people specified in the trust agreement, called the beneficiaries.
</li>
<li>Limited Liability Companies (L.L.C.)
This form of ownership is a legal entity and is similar to both the corporation and the partnership. The operating agreement will determine how the L.L.C. functions and is taxed. Like the corporation its existence is separate from its owners.
</li>
</ol>
*In cases of corporate, partnership, L.L.C. or trust ownership - required documents may include corporate articles and bylaws, partnership agreements, L.L.C. operating agreement and trust agreements and/or certificates.
Remember:
How title is vested has important legal consequences. You may wish to consult an attorney to determine the most advantageous form of ownership for your particular situation.

Common Ways of Holding Title

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Builders, in an effort to combat the dual problem of an increasing population and a declining availability of prime land, are increasingly turning to common interest developments (CIDs) as a means to maximize land use and offer homebuyers convenient, affordable housing.
The two most common forms of common interest developments in many states are Condominiums and Planned Unit Developments, often referred to as PUDs. The essential characteristics shared by these two forms of ownership are:
<ol>
<li>Common ownership of private residential property</li>
<li>Mandatory membership of all owners in an association which controls use of the common property</li>
<li>Governing documents which establish the procedures for governing the association, the rules which the owners must follow in the use of their individual lots or units as well as the common properties</li>
<li>A means by which owners are assessed to finance the operation of the association and maintenance of the common properties</li>
</ol>
Before continuing further, it may be helpful to clarify a common misconception about Condominiums and PUDs. The terms Condominium and PUD refer to types of interests in land, not to physical styles of dwellings. Therefore, when homebuyers say that they are buying a townhouse, it is not the same as saying that they are buying a condominium. When homebuyers say that they are buying a unit in a PUD, they are not necessarily buying a single-family detached home. A townhouse might legally be a condominium, a unit or lot in a Planned Unit Development, or a single-family detached residence. The terms Condominium or PUD will say a great deal about the ownership rights the buyer will receive in the unit and the interest they will acquire in the common properties or common areas of the development.
Common interest developments offer many advantages to homebuyers, such as low maintenance and access to attractive amenities. However, there are restrictions and duties which come with ownership of a Condominium or PUD that buyers should be aware of prior to purchase.
To acquaint you with various aspects of ownership in common interest developments, the Land Title Association has answered some of the questions most commonly asked about Condominiums and PUDs.
What are the basic differences between ownership of a Condominium and ownership of a PUD?
The owner(s) of a unit within a typical Condominium project owns 100% of the unit, as defined by a recorded Condominium Plan. As well, they will own a fractional or percentage interest in all common areas of the Condominium project.
The owner(s) of a lot within a PUD owns the lot which has been conveyed to them-as shown in the recorded Tract Map or Parcel Map-and the structure and improvements thereon. In addition, they receive rights and easements to use in common areas owned by another-frequently a Homeowner&rsquo;s association-of which the individual lot owners are members.
The above are basic descriptions and should not be considered legal definitions.
Besides ownership of my unit, what other amenities (common areas) will I be acquiring use of and how will I own them?
Common interest areas may span the spectrum from the ordinary-buildings, roadways, walkways and utility rooms-to the extravagant-equestrian trails and golf courses-with more usual amenities including community swimming pools and clubhouse facilities.
Your ownership rights in common areas will be spelled out in your project&rsquo;s Declaration of Covenants, Conditions and Restrictions (CC and R&rsquo;s). The subject of CC and R&rsquo;s will be expanded upon later in this brochure.
As we stated in the answer to the previous question, Condominium owners own a fractional or percentage interest in common with all other owners in the Condominium project, in all common areas. PUD owners receive rights and easements to use of common areas through their membership in a Homeowner&rsquo;s association, which typically owns and controls the common areas. Some PUD projects, however, provide that the individual homeowners will own a fractional interest in the common areas. Again, in this case, a Homeowner&rsquo;s association will have the right to regulate the use of the common areas and to assess for purposes of maintaining the common areas.
Check your CC and R&rsquo;s and association Bylaws (basically, rules governing the management of the development) to insure that you understand your rights to use of your unit and common areas.
What services will my Homeowner&rsquo;s assessments help to finance?
Your Homeowner&rsquo;s assessments support not only the easily recognizable-building and swimming pool upkeep, landscape maintenance-but also the unseen-association management and legal fees and association insurance.
As well, reserves must be factored into your assessments, including reserves for replacement of such items as roadways and walkways. In the case of condominiums, where ownership is usually limited to airspace within the walls, floors and ceiling of the unit, reserves will frequently fund replacement of such items as roofs and plumbing.
Each member of the Homeowner&rsquo;s association, upon purchasing their unit, must receive a pro forma operating budget from the association. Basically, this will be a financial statement of the income and obligations of the association, which must include an estimate of the life of the obligations covered under the assessments and how their replacement is being funded.
What happens if I fail to pay my Homeowner&rsquo;s assessments?
Delinquency fees will be added onto the unpaid assessments.
Should your delinquency continue, the association has the right to place a lien upon your property. The lien may lead to a foreclosure if the delinquency is not paid.
Of what importance are CC and R&rsquo;s and Bylaws?
CC and R&rsquo;s and Bylaws are the rules and regulations of the community, meant to guide the use of individual properties and common areas. Buyers should be aware that CC and R&rsquo;s and Bylaws may be written so as to restrict not only property use, but also to restrict owners&rsquo; lifestyles, for instance, spelling out hours during which entertainment, such as parties, may be hosted.
CC and R&rsquo;s and Bylaws are highly important and should be thoroughly examined and understood prior to purchase. They bind all owners and their successors to the rules and regulations of the community. Failure to follow those rules and regulations can be considered a breach of contract. Legal action may be taken against the homeowner for any such breach.
At what point in the real estate transaction will I be allowed to review a copy of my CC and R&rsquo;s and Bylaws?
Legally, it is the responsibility of the owner to provide the prospective purchaser with the governing documents of the development (CC and R&rsquo;s and Bylaws), the most recent financial statement of the Homeowner&rsquo;s association and notice of any dues delinquent on the unit.
The law states that these items should be delivered as soon as practicable; however, the prospective buyer should request to see them as early as possible. If you do not fully understand what is stated in these documents, consult a real property attorney.
Should I object to items included in the CC and R&rsquo;s and/or Bylaws, will I have the opportunity to terminate those items prior to taking ownership?
No. The process required to terminate these restrictions is often complex and costly. Termination of restrictions will require, at least, a majority vote by members of the Homeowner&rsquo;s association, and may require litigation.
What if I have further questions regarding Condominium and PUD ownership?
Ask any questions you may have before you buy! Don&rsquo;t wait to take ownership to find out about restrictions and regulations affecting your Homeownership rights.

Condominium and PUD Ownership

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When reading an offer, keep in mind that you are out to get the best price AND the best terms for you. If you focus solely on the price, you may overlook terms that could be favorable to you as a buyer.
Some terms that may work in your favor:
<ul>
<li>higher-than-market-interest in a second mortgage for your home</li>
<li>the buyer will pay for most or all of the closing costs</li>
<li>the buyer will take care of any repairs</li>
<li>quick close - the buyer is pre-approved and ready to close in a timeframe that best suits you</li>
<li>all-cash deal</li>
</ul>
When reading through offers, remember to look at the whole package. Take the time that you need to assess what is being offered and if it meets your needs.

Considering Offers

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