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<p></p><div class="se-component se-image-container __se__float- __se__float-center" contenteditable="false"><figure style="margin: auto; width: 588px;"><img src="https://library-ihouseprd.b-cdn.net/blog/financial-documents.jpg" data-origin="100,930" alt="" data-proportion="true" data-size="588px,433px" data-align="center" data-index="0" data-file-name="financial-documents.jpg" data-file-size="0" style="width: 588px; height: 433px;"></figure></div><p></p><p>When buying a home, it is not enough to just come up with the money. With the exception of no asset verification loans, lenders want to verify where the money for your new home will be coming from. If you can document that the funds are coming from your personal savings, the lender is more confident of your strength as a borrower.</p><p>In addition, if you can verify that you have additional assets that are not needed for the down payment, it is important to document those, too. Additional assets are reserves you can draw upon during times of trouble, such as unemployment, medical emergencies, and similar occurrences. Additional assets can also help to document that you have a history of saving money, which makes you a more dependable borrower.</p><p>It is extremely important to completely document the paper trail of any funds you use for down payment and closing costs. The sections below provide guidance on both verifying assets and documenting them as a source of your down payment.</p><h2>Checking, Savings, &amp; Money Market Accounts</h2><p>The quickest and easiest way to document funds in your bank account is to provide your lender with copies of your most recent bank statements. Most lenders request two months of bank statements, but some still ask for three. Some lenders still send a Verification of Deposit to your bank in order to determine your current bank balances and average balance for the last two months. However, that is the old way of doing business and most lenders nowadays prefer to have bank statements.</p><p>If the money you are using for the down payment and closing costs has been in the bank for the entire period covered by the bank statements, you’re fine. These are known as “seasoned funds.” However, if your statements show any large or unusual deposits, the lender will ask you to explain them and document their source.</p><h2>Stocks, Bonds, Mutual Funds, etc.</h2><p>Most of those who own stocks get a monthly or quarterly statement from their brokerage. You will need to supply statements for the most recent sixty or ninety days in order to document these assets.</p><p>Though it is rare nowadays, some people actually have stock certificates instead of having a brokerage account. When this is the situation, make copies of the certificates and provide those copies to your lender. You might also want to supply tax records to indicate you have owned these stocks for some time.</p><p>If part of your down payment will come from the sale of stocks and investments, you will need to keep all documentation that applies to the sale. Provide these copies to your lender as well.</p><h2>Gifts</h2><p>Especially when buying a first home, some borrowers need help coming up with the down payment. This help should come in the form of a gift from a close family member. Lenders will require the donors to sign a special form called a gift letter. The gift letter states the relationship between the parties, the address of the purchased property, the amount of the gift, and sometimes the source of the funds used to make the gift. The gift letter also clearly states that the funds are a gift and not required to be repaid.</p><p>With most lenders, the donor will have to also provide evidence that they have the ability to make the gift. This can be in the form of a bank or stock statement to show they have the funds available. You should also make a copy of the check used to make the gift and keep a copy of the deposit receipt when you deposit the gift funds into your bank account or escrow.</p><h2>401K or Retirement Accounts</h2><p>It is important to provide documentation about your retirement accounts or 401K programs because this is another asset you could draw upon as reserves in case of a problem. It is also another way to show you have a savings history. Just provide a copy of your most recent statement to your lender.</p><p>Many people use these accounts as a source of funds for their down payment, too. Some employers allow you to cash out a portion of the 401K and some allow you to borrow against it. Be sure to keep copies of all paperwork involving the transaction. If they cut you a check, be sure to make a photocopy of that, too, including any receipt for deposit into your personal bank account.</p><p>If you are borrowing against your 401K, some lenders will count this as an additional debt to go along with car payments, credit cards and other obligations. This may seem kind of silly because you are borrowing your own money, but from the lender’s viewpoint it is still a monthly obligation that you must come up with and should be taken into account. If you are tight on your debt-to-income ratios in qualifying for a home loan, this could be an important consideration. It may affect whether you choose to cash out the account and pay any tax penalty, or simply borrow against it.</p><h2>Employers</h2><p>Some companies provide down payment assistance for their employees. They may feel that Homeowners are more stable and reliable employees, or that providing down payment assistance fosters an environment of higher morale and loyalty to the firm. Just make copies of all the paperwork, including a copy of the check and the receipt when you deposit the funds into your personal bank account. It is important that these funds do not require repayment.</p><h2>Savings Bonds</h2><p>If you have Savings Bonds, remember that they are also financial assets. Since you hold the actual bonds in your possession, the easiest and best way to verify them for your mortgage lender is to make photocopies of them. If you choose to cash them in for down payment or closing costs, you should do this at your local bank. Be sure to keep copies of the paperwork the bank provides because that will establish the current value of the bonds and show that you received their cash value.</p><h2>Personal Property - Cars, Antiques, etc.</h2><p>Personal property includes automobiles, vehicles, boats, furniture, collections, heirlooms, antiques, art, clothing, and practically everything you own except for real estate. The mortgage application asks you to estimate the value of these items.</p><p>The larger the loan amount, the more important it is for you to provide details on your personal property. This is because larger loans usually indicate larger incomes, and lenders check to see if your personal property matches your income. If it does not, this sends a red flag to the underwriter and they take a closer look at your application.</p><p>You are not required to document the value of personal property unless you intend to sell them to come up with your down payment.</p><h2>Selling Personal Property</h2><p>For those Homebuyers who do sell personal property in order to come up with their down payment, the verification process can be arduous. Lenders are much stricter about documenting this method of coming up with your source of funds.</p><p>Selling a car is perhaps the easiest to document. First, you need to photocopy the registration that shows you actually own the vehicle. You will have to provide a copy of the page in the “Blue Book” that shows your model and its value. Then you need to photocopy the bill of sale showing the transfer to another individual and a copy of the check used to purchase the vehicle. Do not get paid in cash because that makes it impossible to show you actually received the funds. Make a copy of the receipt when you deposit the funds into the bank.</p><p>Other types of personal property are more difficult because you have to show that you actually own the property and that it actually has the value that you sold it for. This is a little harder to do for most assets than it is for automobiles.</p><p>Records showing you purchased the property would be helpful. You could also provide an old inventory that documents ownership. To determine value, you may have to contract with an independent appraiser or a specialist who has the knowledge for that particular type of property.</p><p>If you cannot document the item’s value, the lender will not view the sale as an acceptable source of funds. Just like selling a car, you have to prove you own the item, make a copy of the bill of sale, copy the check used to purchase the item, and make a copy of your receipt when you deposit the funds into your bank.</p><p><br></p>

Documenting Your Assets - Verifying Your Down Payment

<p></p><div class="se-component se-image-container __se__float- __se__float-center" contenteditable="false"><figure style="margin: auto; width: 588px;"><img src="https://library-ihouseprd.b-cdn.net/blog/foreclosure-for-sale.jpg" data-origin="100,930" alt="" data-proportion="true" data-size="588px,565px" data-align="center" data-index="0" data-file-name="foreclosure-for-sale.jpg" data-file-size="0" style="width: 588px; height: 565px;"></figure></div><p></p><p><span style="font-size: 14px;">With the housing bubble burst and the subprime mortgage crisis, millions of homeowners found themselves unable to make their mortgage payments. Many found themselves owing more on the house than the home was worth. Many just walked away from their homes. As a result of these complicated issues, millions of homes were foreclosed.</span></p><p><span style="font-size: 14px;">While this isn’t the only reason for which homes are foreclosed, it has been a widespread one. With all the foreclosed properties, there has also been extensive interest in buying these properties at a bargain price.</span></p><p><span style="font-size: 14px;">It is true that foreclosed properties can be priced at a significant discount, but they are also a much riskier investment. Before making an offer on a foreclosed property, do your due diligence.</span></p><p><span style="font-size: 14px;">Things you must do before buying a foreclosure:</span></p><ul><li style="font-size: 14px;">Do a title search - make sure that when you purchase a foreclosure that you are the only person who has any ownership claim</li><li style="font-size: 14px;">Check for liens - find out if there are any liens against the property because you will be responsible for paying them</li><li style="font-size: 14px;">Check for a second mortgage - you don’t want to be surprised by an extra mortgage that you will need to pay</li><li style="font-size: 14px;">Know how good of a “bargain” you’re getting - foreclosures are sold “as is” and in many cases you will not be able to do a proper inspection. You may end up paying thousands of dollars repairing the property before it is fit to be lived in.</li></ul><p><span style="font-size: 14px;">It is also important to consider that there are different types of foreclosure properties and each type comes with its own advantages and disadvantages. The different types of foreclosure purchases are:</span></p><ol><li style="font-size: 14px;">Pre-foreclosure</li><li style="font-size: 14px;">Auction</li><li style="font-size: 14px;">Real Estate Owned (REO), also called “bank owned”</li></ol><h2><span style="font-size: 14px;">Pre-Foreclosure</span></h2><p><span style="font-size: 14px;">A pre-foreclosure is when you buy the home directly from the homeowner, before the bank officially forecloses. This type of purchase does not require as much capital as other foreclosures. Also, since you are purchasing straight from the homeowner, you will be able to gather all of the necessary information, such as inspection reports, title information, etc. that may not be available with other foreclosure properties. Once you take over the mortgage, you will be responsible for all future payments as well as any overdue back payments.</span></p><h2><span style="font-size: 14px;">Auction</span></h2><p><span style="font-size: 14px;">A foreclosure property will usually end up at an auction. Real estate auction practices vary by state but common practice is for the auction to be held on courthouse steps, in front of the foreclosed home, or at the county clerk’s office.</span></p><p><span style="font-size: 14px;">Real estate auctions offer the best chance for a great deal but also hold the greatest risk. Auction properties are sold as is, with no opportunity for potential buyers to perform inspections. When buying a home at auction, the buyer must pay cash, usually a cashier’s check. It is also possible that there may still be tenants living in the home. In such a case, you would be responsible for the often costly eviction process.</span></p><h2><span style="font-size: 14px;">REO</span></h2><p><span style="font-size: 14px;">Once a foreclosure has gone to auction and failed to sell, it becomes a Real Estate Owned, or bank owned, property. Most homes do not sell at auction, most fail to even get any bids.</span></p><p><span style="font-size: 14px;">An REO property is the least likely of the foreclosure properties to represent a bargain, but it is also the least risky. The property can be fully inspected, any title issues can be found and dealt with, and the sale can be subject to a mortgage. REO properties also tend to be in better condition than other foreclosure properties.</span></p><p><span style="font-size: 14px;">Another thing to keep in mind when purchasing a foreclosure is that some states have a redemption period that allows the original owner to buy back the property by paying the remaining balance owed. You may be able to have this redemption period waived, so check the state laws on this topic before purchasing.</span></p><p><span style="font-size: 14px;">Still interested in buying a foreclosure property? If so, always do your research before purchasing!</span></p><p><br></p>

Thinking About Buying a Foreclosure?

<p></p><div class="se-component se-image-container __se__float- __se__float-center" contenteditable="false"><figure style="margin: auto; width: 588px;"><img src="https://library-ihouseprd.b-cdn.net/blog/getting-keys.jpg" data-origin="100," alt="" data-proportion="true" data-size="588px,370px" data-align="center" data-index="0" data-file-name="getting-keys.jpg" data-file-size="0" style="width: 588px; height: 370px;"></figure></div><p></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">The following items represent a typical list of what an escrow holder does and does not do:</span></p><p><span style="font-size: 14px;"><strong>THE ESCROW HOLDER:</strong></span></p><ul><li style="font-size: 14px;">serves as the neutral “stakeholder” and the communications link to all parties in the transaction;</li><li style="font-size: 14px;">prepares escrow instructions;</li><li style="font-size: 14px;">requests a preliminary title search to determine the present condition of title to the property;</li><li style="font-size: 14px;">requests a beneficiary’s statement if debt or obligation is to be taken over by the buyer;</li><li style="font-size: 14px;">complies with lender’s requirements, specified in the escrow agreement;</li><li style="font-size: 14px;">receives purchase funds from the buyer;</li><li style="font-size: 14px;">prepares or secures the deed or other documents related to escrow;</li><li style="font-size: 14px;">prorates taxes, interest, insurance and rents according to instructions;</li><li style="font-size: 14px;">secures releases of all contingencies or other conditions as imposed on any particular escrow;</li><li style="font-size: 14px;">records deeds and any other documents as instructed;</li><li style="font-size: 14px;">requests issuance of the title insurance policy;</li><li style="font-size: 14px;">closes escrow when all the instructions of buyer and seller have been carried out;</li><li style="font-size: 14px;">disburses funds as authorized by instructions, including charges for title insurance, recording fees, real estate commissions and loan payoffs;</li><li style="font-size: 14px;">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).</li></ul><p><span style="font-size: 14px;"><strong>THE ESCROW HOLDER DOES NOT:</strong></span></p><ul><li style="font-size: 14px;">offer legal advice;</li><li style="font-size: 14px;">negotiate the transaction;</li><li style="font-size: 14px;">offer investment advice.</li></ul><p><span style="font-size: 14px;">Your local title company should be happy to provide additional information.</span></p><p><span style="font-size: 14px;">Article by CLTA</span></p><p><br></p>

The Functions of an Escrow

<p><br></p><div class="se-component se-image-container __se__float-center" contenteditable="false"><figure style="margin: auto; width: 588px;"><img src="https://library-ihouseprd.b-cdn.net/blog/calculating-assets.jpg" data-origin="100," alt="" data-proportion="true" data-size="588px,329px" data-align="center" data-index="0" data-file-name="calculating-assets.jpg" data-file-size="0" style="width: 588px; height: 329px;"></figure></div><p><span style="font-size: 14px;">Sellers of real property will have certain information regarding the sale reported to the Internal Revenue Service.</span></p><p><span style="font-size: 14px;">This required reporting is a consequence of the Tax Reform Act of 1986; it is intended to encourage taxpayer compliance and aid in audit and enforcement efforts by the I.R.S.</span></p><p><span style="font-size: 14px;">To help you better understand this subject, the Land Title Association has answered some of the questions most commonly asked about Required Reporting to the I.R.S.</span></p><h3><span style="font-size: 14px;">Who is required to report to the I.R.S.?</span></h3><p><span style="font-size: 14px;">Sellers of real property, under guidelines established by the I.R.S., are required to have their gross proceeds from the sale reported on a Form 1099S. When a settlement agent is used, the I.R.S. makes this agent responsible for the delivery of the information on the Form 1099S.</span></p><p><span style="font-size: 14px;">The settlement agent generally will be the escrow agent or title company; however, it may be an attorney, real estate broker or other person providing settlement services.</span></p><h3><span style="font-size: 14px;">What is an I.R.S. Form 1099S, and what will be reported?</span></h3><p><span style="font-size: 14px;">The Form 1099S is the reporting form adopted by the I.R.S. for submitting the information required by law.</span></p><p><span style="font-size: 14px;">The information will be transferred onto magnetic media by the settlement agent who will store the information and make the required report to the I.R.S. The settlement agent is also responsible for keeping a master copy of all transactions reported.</span></p><p><span style="font-size: 14px;">In general, information required by the I.R.S. falls into the following categories:</span></p><ol><li style="font-size: 14px;">The name, address and taxpayer ID number (social security or tax identification number) of the seller(s)</li><li style="font-size: 14px;">A general description of the property (in most cases an address)</li><li style="font-size: 14px;">The closing date of the transaction</li><li style="font-size: 14px;">The gross proceeds of the transaction (even though gross proceeds do not correspond to taxable income)</li><li style="font-size: 14px;">Any property involved as part of the transaction other than cash or cash equivalent</li><li style="font-size: 14px;">The name, address and taxpayer identification number of the settlement agent.</li><li style="font-size: 14px;">Real estate tax paid in advance that is allocable to the buyer.</li></ol><h3><span style="font-size: 14px;">On what type of transactions is a Form 1099S required?</span></h3><p><span style="font-size: 14px;">Currently, typical homeowner transactions covered include sales and exchanges of 1-4 family residential properties such as houses, townhouses, and condominiums. Also reportable are sales or exchanges of improved or unimproved land, commercial or industrial buildings, condominiums, stock in a cooperative housing corporation and mobile homes (manufactured homes) affixed to real property.</span></p><p><span style="font-size: 14px;">Specifically excluded from reporting are foreclosures and abandonment of real property and financing or refinancing of properties.</span></p><h3><span style="font-size: 14px;">What happens if the seller(s) refuses to provide the taxpayer identification number for the Form 1099S?</span></h3><p><span style="font-size: 14px;">The settlement agent is required to request the transferor’s taxpayer identification number(s) (TIN(s)) before the time of closing. You may request a TIN on Form W-9 or use an alternative written request. The IRS has included sample wording of an alternative written request in the instructions for preparation of Form 1099S.</span></p><p><span style="font-size: 14px;">Should the seller fail to provide the identification number and certify its correctness, the settlement agent may choose to:</span></p><ol><li style="font-size: 14px;">Delay the closing of the transactions until the information is furnished, or</li><li style="font-size: 14px;">Complete the transaction and report to the I.R.S. that an attempt was made to obtain the information from the seller.</li></ol><h3><span style="font-size: 14px;">How is the sale reported when there is more than one seller involved or when multiple sellers do not own equal interests in the property?</span></h3><p><span style="font-size: 14px;">Multiple sellers may allocate the gross proceeds among themselves for purposes of reporting. If there is no allocation, an incomplete allocation or conflicting allocations, then the entire gross proceeds will be reported for each seller.</span></p><h3><span style="font-size: 14px;">Where can I go for further information on taxation of real property?</span></h3><p><span style="font-size: 14px;">The I.R.S. provides free publications that explain the tax aspects of real estate transactions. You may wish to order:</span></p><ul><li style="font-size: 14px;">Publication #523 “Tax Information on Selling Your Home”</li><li style="font-size: 14px;">Publication #530 “Tax Information for Home Owners”</li><li style="font-size: 14px;">Publication #544 “Sales and Other Dispositions of Assets”</li><li><span style="font-size: 14px;">Publication #551 “Basis of Assets”</span><p><span style="font-size: 14px;">&nbsp;</span></p><span style="font-size: 14px;"></span></li></ul><p><span style="font-size: 14px;">To place your order, phone toll-free (800) 829-3676.<br><br></span></p><p><span style="font-size: 14px;">Article by CLTA</span></p><p><br></p>

Required Reporting to the I.R.S.

<p><br></p><div class="se-component se-image-container __se__float-center" contenteditable="false"><figure style="margin: auto; width: 588px;"><img src="https://library-ihouseprd.b-cdn.net/blog/items-you-need-for-loan.jpg" data-origin="100,398.875" alt="" data-proportion="true" data-size="588px,398.875px" data-align="center" data-index="0" data-file-name="items-you-need-for-loan.jpg" data-file-size="0" style="width: 588px; height: 398.875px;"></figure></div><p><span style="font-size: 14px;">Have These Items Ready When You Apply For a Loan</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">Verifications are still mailed out, but usually as part of quality control procedures.</span></p><p><span style="font-size: 14px;">These are the things you need to supply to your lender to get a quick approval using alternate documentation</span></p><h2><span style="font-size: 14px;">Income Items</span></h2><ul><li style="font-size: 14px;">W2 forms for the last two years</li><li style="font-size: 14px;">Pay stubs covering a 30 day period</li><li><span style="font-size: 14px;">Federal tax returns (1040s) for the last two years, if:</span><ul><li style="font-size: 14px;">you are self-employed</li><li style="font-size: 14px;">earn more than 25% of your income from commissions or bonuses</li><li style="font-size: 14px;">own rental property</li><li style="font-size: 14px;">or are in a career where you are likely to take non-reimbursed business expenses</li></ul><span style="font-size: 14px;"></span></li><li style="font-size: 14px;">Year-to-Date Profit and Loss Statement (for self employed)</li><li style="font-size: 14px;">Corporate or partnership tax returns (if applicable)</li><li style="font-size: 14px;">Pension Award letter (for retired individuals)</li><li style="font-size: 14px;">Social Security Award letters (for those on Social Security)</li></ul><h2><span style="font-size: 14px;">Asset Items</span></h2><ul><li style="font-size: 14px;">Bank statements for previous two months (sometimes three) on all accounts. All pages.</li><li style="font-size: 14px;">Statements for two months on all stocks, mutual funds, bonds, etc.</li><li style="font-size: 14px;">Copy of most recent 401K statement (or other retirement assets)</li><li style="font-size: 14px;">Explanations for any large deposits and source of those funds</li><li style="font-size: 14px;">Copy of HUD1 Settlement Statement on recent sales of homes</li><li style="font-size: 14px;">Copy of Estimated HUD1 Settlement Statement if a previous home is for sale, but not yet closed</li><li style="font-size: 14px;">Gift letter (if some of the funds come as a gift from a family member)</li><li><span style="font-size: 14px;">Gifts can also require:</span><ul><li style="font-size: 14px;">Verification of donor’s ability to make the gift (bank statement)</li><li style="font-size: 14px;">Copy of the check used to make the gift</li><li style="font-size: 14px;">Copy of the deposit receipt showing the funds deposited into bank account or escrow</li></ul><span style="font-size: 14px;"></span></li></ul><h2><span style="font-size: 14px;">Credit Items</span></h2><ul><li style="font-size: 14px;">Landlord’s name, address, and phone number (for verification of rental)</li><li><span style="font-size: 14px;">Explanations for any of the following items that may appear on your credit report:</span><ul><li style="font-size: 14px;">Late payments</li><li style="font-size: 14px;">Credit inquiries in the last 90 days</li><li style="font-size: 14px;">Charge-offs</li><li style="font-size: 14px;">Collections</li><li style="font-size: 14px;">Judgments</li><li style="font-size: 14px;">Liens</li></ul><span style="font-size: 14px;"></span></li><li style="font-size: 14px;">Copy of bankruptcy papers if you have filed bankruptcy within the last seven years</li></ul><h2><span style="font-size: 14px;">Other</span></h2><ul><li style="font-size: 14px;">Copy of purchase agreement (if you have already made an offer)</li><li><span style="font-size: 14px;">To document receipt of child support (if you desire to show it as income)</span><ul><li style="font-size: 14px;">Copy of Divorce Settlement (to show the amount)</li><li style="font-size: 14px;">Copies of twelve months canceled checks to document actual receipt of fund</li></ul><span style="font-size: 14px;"></span></li></ul><h2><span style="font-size: 14px;">FHA Loans</span></h2><ul><li style="font-size: 14px;">Copy of Social Security Card (or other documentation of social security number)</li><li style="font-size: 14px;">Copy of Driver’s license</li></ul><h2><span style="font-size: 14px;">VA Loans</span></h2><ul><li style="font-size: 14px;">Copy of DD214</li></ul><h2><span style="font-size: 14px;">Refinances</span></h2><ul><li style="font-size: 14px;">Copy of Note on existing loan</li><li style="font-size: 14px;">Copy of HUD1 Settlement Statement on existing loan</li><li style="font-size: 14px;">Name, address, phone number, loan number of existing loan/lender</li></ul><p><br></p>

Items You Need When Applying For a Loan

<p><br></p><div class="se-component se-image-container __se__float-center" contenteditable="false"><figure style="margin: auto; width: 588px;"><img src="https://library-ihouseprd.b-cdn.net/blog/time-and-money.jpg" data-origin="100," alt="" data-proportion="true" data-size="588px,335px" data-align="center" data-index="0" data-file-name="time-and-money.jpg" data-file-size="0" style="width: 588px; height: 335px;"></figure></div><p><span style="font-size: 14px;">In order to get the highest price in the shortest time, you need to know how to market your home. The better you market your home, the more offers you will get. And the more offers you get, the more choices you have to get the price and terms you want.</span></p><p><span style="font-size: 14px;">The most important factor of marketing your home is pricing it right. Your price should be adjusted to reflect the market and your property’s worth. The key is to get as many people as possible checking out your fairly priced property. If your property is not priced fairly, there will be no buyers because your price is set too high.</span></p><p><span style="font-size: 14px;">Another important factor is the condition of your home. Make sure that your home looks ready to be sold. Fix any defects (peeling or faded paint, cracks, stains, etc.) Condition alone can sometimes prompt fast buying decisions. Not only should you fix any defects, but consider upgrading your home by making major repairs and cosmetic improvements before selling. A nice looking home triggers the emotional response that can lead to a financial response.</span></p><p><span style="font-size: 14px;">Learn how to negotiate the best terms for all parties involved. Terms are another factor that may be adjusted to attract buyers. If you insist on getting your asking price, think of what you can offer to the buyers. For example, improvements you’ve made or even offering seller financing at a lower than market interest rate on a portion of the sale price. Convince them why they should be paying the price you have set.</span></p><p><span style="font-size: 14px;">Lastly, get the buzz out about your home. List your house with a hot agent that ensures your house is listed on the MLS and on the Internet. On your own, get the word out. It should always be visible to passersby that your house is for sale, whether it is through signs, local advertisements or you telling friends, family, and acquaintances.</span></p><p><br></p>

Getting the Highest Price in the Shortest Time

<p><br></p><div class="se-component se-image-container __se__float-center" contenteditable="false"><figure style="margin: auto; width: 588px;"><img src="https://library-ihouseprd.b-cdn.net/blog/getting-pre-approved.jpg" data-origin="100," alt="" data-proportion="true" data-size="588px,329px" data-align="center" data-index="0" data-file-name="getting-pre-approved.jpg" data-file-size="0" style="width: 588px; height: 329px;"></figure></div><p><span style="font-size: 14px;">It used to be that buyers could go house shopping and when they have found their dream home, then they go to get pre-approved. However, in today’s market, that has proven to be one of the least effective methods in landing the dream home.</span></p><p><span style="font-size: 14px;">Most lenders can pre-qualify you for a mortgage over the phone. Based on general questions about your income, debt, assets, and credit history, lenders can estimate how much mortgage you qualify for. However, being pre-qualified and pre-approved are different things. Pre-approval means that you have applied for a mortgage; you have filled out the mortgage application, received your credit report, and verified your employment, assets, etc. When you are pre-approved, you know exactly what the maximum loan amount will be.</span></p><p><span style="font-size: 14px;">A pre-qualified letter is not verified and in essence, does not count for much if you are competing with other buyers who are pre-approved. When you are pre-approved, you and the seller know exactly how much house you can afford. It gives you credibility as an interested buyer and lets the seller know immediately that you will qualify for a loan to buy their property.</span></p><p><span style="font-size: 14px;">In addition to being pre-approved, it’s important to be pre-approved with a legitimate lender. Legitimate lenders include: banks, mortgage bankers, credit unions, savings and loan associations, mortgage brokers, and online lenders.</span></p><p><span style="font-size: 14px;">Some lenders to avoid: those who lose a form or misplace a file, those who gather information from you in an unorganized manner, those who are not informed about interest rates, points or costs, and those who cannot provide you with the right information</span>.</p><p><br></p>

Getting a Legitimate Lender and Getting Pre-Approved

<h2>What is a FICO® Score?</h2><p>FICO® stands for Fair Isaac &amp; Company and is the name for the most well known credit scoring system, used by Experian. The credit bureau’s computer evaluates a complete credit profile and assigns a score, which is used to estimate credit worthiness. Each of the three bureaus (Experian, Trans Union, Equifax) employs its own scoring system, so a given person will usually have 3 separate scores. Someone with a higher score will be viewed as a better risk than someone with a lower score. Typically, scores will range from about 600 to 700 or above, although some cases will be outside this range.</p><h2>What Kind of Score Do I Need for a Home Loan?</h2><p>There are as many answers to this question as there are loan programs available. Most lenders will take the average of all 3 scores to evaluate an application. Niche loans, such as Easy Qualifier and low down payment loans will have higher FICO® requirements.</p><h2>How is My Score Determined?</h2><p>The FICO® model has 5 main elements:</p><ol><li>Past payment history (about 35% of score) The fewer the late payments the better. Recent late payments will have a much greater impact than a very old Bankruptcy with perfect credit since.<br>Myth - paying off cards with recent late payments will fix things. Payoffs do not affect payment history.</li><li>Credit use (about 30% of score) Low balances across several cards is better than the same balance concentrated on a few cards used closer to maximums. Too many cards can bring down the score, but closing accounts can often do more harm than good if the entire profile is not considered. BE CAREFUL WHEN CLOSING ACCOUNTS!</li><li>Length of credit history (15% of score) The longer accounts have been open the better for the score. Opening new accounts and closing seasoned accounts can bring down a score a great deal.</li><li>Types of credit used (10% of score) Finance company accounts score lower than bank or department store accounts.</li><li>Inquiries (10% of score) Multiple inquiries can be a risk if several cards are applied for or other accounts are close to maxed out. Multiple mortgage or car inquiries within a 14 day period are counted as one inquiry.</li></ol><h2>How Can I Raise My Score</h2><p>Your score can only be changed by the way that item is reported directly to the credit bureaus (Experian, TU, Equifax). Written confirmation from the creditor is required. It is best to make these corrections before you try to purchase a home, because you can never be sure the exact impact a change will have on your score.</p><h2>What Does This Mean to Me?</h2><p>You should have your credit reviewed BEFORE you look for a home, and work with a PROFESSIONAL loan officer to make sure your loan is based on the most accurate information.</p><p><br></p>

WHAT'S A FICO®?

<p></p><div class="se-component se-image-container __se__float- __se__float-center" contenteditable="false"><figure style="margin: auto; width: 587px;"><img src="https://library-ihouseprd.b-cdn.net/blog/credit-report.jpg" data-origin="100,930" alt="" data-proportion="true" data-size="587px,522px" data-align="center" data-index="0" data-file-name="credit-report.jpg" data-file-size="0" style="width: 587px; height: 522px;"></figure></div><p></p><p>Years ago, credit scoring had little to do with mortgage lending. When reviewing the credit worthiness of a borrower, an underwriter would make a subjective decision based on past payment history.</p><p>Then things changed.</p><p>Lenders studied the relationship between credit scores and mortgage delinquencies. There was a definite relationship. Almost half of those borrowers with FICO® scores below 550 became ninety days delinquent at least once during their mortgage. On the other hand, only two out of every 10,000 borrowers with FICO® scores above eight hundred became delinquent.</p><p>So lenders began to take a closer look at FICO® scores and this is what they found out. The chart below shows the likelihood of a ninety day delinquency for specific FICO® scores.</p><table><tbody><tr><th><div>FICO® Score</div></th><th><div>Odds of a Delinquent Account</div></th></tr><tr><td><div>595</div></td><td><div>2 to 1</div></td></tr><tr><td><div>600</div></td><td><div>4 to 1</div></td></tr><tr><td><div>615</div></td><td><div>9 to 1</div></td></tr><tr><td><div>630</div></td><td><div>18 to 1</div></td></tr><tr><td><div>645</div></td><td><div>36 to 1</div></td></tr><tr><td><div>660</div></td><td><div>72 to 1</div></td></tr><tr><td><div>680</div></td><td><div>144 to 1</div></td></tr><tr><td><div>780</div></td><td><div>576 to 1</div></td></tr></tbody></table><p><span style="font-size: 14px;">If you were lending a couple hundred thousand dollars, who would you want to lend it to?</span></p><h3><span style="font-size: 14px;">FICO® Scores, What Affects Them, How Lenders Look At Them</span></h3><p><span style="font-size: 14px;">Imagine a busy lending office and a loan officer has just ordered a credit report. He hears the whir of the laser printer and he knows the pages of the credit report are going to start spitting out in just a second. There is a moment of tension in the air. He watches the pages stack up in the collection tray, but he waits to pick them up until all of the pages are finished printing. He waits because FICO® scores are located at the end of the report. Previously, he would have probably picked them up as they came off. A FICO® above 700 will evoke a smile, then a grin, perhaps a shout and a “victory” style arm pump in the air. A score below 600 will definitely result in a frown, a furrowed brow, and concern.</span></p><p><span style="font-size: 14px;">FICO® stands for Fair Isaac &amp; Company, and credit scores are reported by each of the three major credit bureaus: TRW (Experian), Equifax, and Trans-Union. The score does not come up exactly the same on each bureau because each bureau places a slightly different emphasis on different items. Scores range from 365 to 840.</span></p><h3><span style="font-size: 14px;">Some of the things that affect your FICO® scores:</span></h3><ul><li style="font-size: 14px;">Delinquencies</li><li style="font-size: 14px;">Too many accounts opened within the last twelve months</li><li style="font-size: 14px;">Short credit history</li><li style="font-size: 14px;">Balances on revolving credit are near the maximum limits</li><li style="font-size: 14px;">Public records, such as tax liens, judgments, or bankruptcies</li><li style="font-size: 14px;">No recent credit card balances</li><li style="font-size: 14px;">Too many recent credit inquiries</li><li style="font-size: 14px;">Too few revolving accounts</li><li style="font-size: 14px;">Too many revolving accounts</li></ul><h3><span style="font-size: 14px;">Sounds confusing, doesn’t it?</span></h3><p><span style="font-size: 14px;">The credit score is actually calculated using a scorecard where you receive points for certain things. Creditors and lenders who view your credit report do not get to see the scorecard, so they do not know exactly how your score was calculated. They just see the final scores.</span></p><p><span style="font-size: 14px;">Basic guidelines on how to view the FICO® scores vary a little from lender to lender. Usually, a score above 680 will require a very basic review of the entire loan package. Scores between 640 and 680 require more thorough underwriting. Once a score gets below 640, an underwriter will look at a loan application with a more cautious approach. Many lenders will not even consider a loan with a FICO® score below 600, some as high as 620.</span></p><h3><span style="font-size: 14px;">FICO® Scores and Interest Rates</span></h3><p><span style="font-size: 14px;">Credit scores can affect more than whether your loan gets approved or not. They can also affect how much you pay for your loan, too. Some lenders establish a base price and will reduce the points on a loan if the credit score is above a certain level. For example, one major national lender reduces the cost of a loan by a quarter point if the FICO® score is greater than 725. If it is between 700 and 724, they will reduce the cost by one-eighth of a point. A point is equal to one percent of the loan amount.</span></p><p><span style="font-size: 14px;">There are other lenders who do it in reverse. They establish their base price, but instead of reducing the cost for good FICO® scores, they add on costs for lower FICO® scores. The results from either method would work out to be approximately the same interest rate. It is just that the second way looks better when you are quoting interest rates on a rate sheet or in an advertisement.</span></p><h2><span style="font-size: 14px;">FICO® Scores and Mortgage Underwriting Decisions</span></h2><h3><span style="font-size: 14px;">FICO® Scores as Guidelines</span></h3><p><span style="font-size: 14px;">FICO® scores are only guidelines and factors other than FICO® scores also affect underwriting decisions. Some examples of compensating factors that will make an underwriter more lenient toward lower FICO® scores can be a larger down payment, low debt-to-income ratios, an excellent history of saving money, and others. There also may be a reasonable explanation for items on the credit history report that negatively impact your credit score.</span></p><h3><span style="font-size: 14px;">They Don’t Always Make Sense</span></h3><p><span style="font-size: 14px;">Even so, sometimes credit scores do not seem to make any sense at all. One borrower with a completely flawless credit history can have a FICO® score below 600. One borrower with a foreclosure on her credit report can have a FICO® above 780.</span></p><h3><span style="font-size: 14px;">Portfolio &amp; Sub-Prime Lenders</span></h3><p><span style="font-size: 14px;">Finally, there are a few portfolio lenders who do not even look at credit scoring, at least on their portfolio loans. A portfolio lender is usually a savings &amp; loan institution that originates some adjustable rate mortgages that they intend to keep in their own portfolio rather than selling them in the secondary mortgage market. These lenders may look at home loans differently. Some concentrate on the value of the home. Some may concentrate more on the savings history of the borrower. There are also sub-prime lenders, or “B &amp; C paper” lenders, who will provide a home loan, but at a higher interest rate and cost.</span></p><h3><span style="font-size: 14px;">Running Credit Reports</span></h3><p><span style="font-size: 14px;">One thing to remember when you are shopping for a home loan is that you should not let numerous mortgage lenders run credit reports on you. Wait until you have a reasonable expectation that they are the lender you are going to use to obtain your home loan. Not only will you have to explain any credit inquiries in the last ninety days, but also numerous inquiries will lower your FICO® score by a small amount. This may not matter if your FICO® is 780, but it would matter if it is 642.</span></p><h3><span style="font-size: 14px;">Don’t Buy A Car Just Before Looking for a Home!</span></h3><p><span style="font-size: 14px;">A word of advice not directly related to FICO® scores. When people begin to think about the possibility of buying a home, they often think about buying other big-ticket items, such as cars. Quite often when someone asks a lender to pre-qualify them for a home loan there is a brand new car payment on the credit report. Often, they would have qualified in their anticipated price range except that the new car payment has raised their debt-to-income ratio, lowering their maximum purchase price. Sometimes they have bought the car so recently that the new loan doesn’t even show up on the credit report yet, but with six to eight credit inquiries from car dealers and automobile finance companies it is kind of obvious. Almost every time you sit down in a car dealership, it generates two inquiries into your credit.</span></p><h3><span style="font-size: 14px;">Credit History is Important</span></h3><p><span style="font-size: 14px;">Nowadays, credit scores are important if you want to get the best interest rate available. Protect your FICO® score. Do not open new revolving accounts needlessly. Do not fill out credit applications needlessly. Do not keep your credit cards nearly maxed out. Make sure you do use your credit occasionally. Always make sure every creditor has their payment in their office no later than 29 days past due.</span></p><p><span style="font-size: 14px;">And never ever be more than thirty days late on your mortgage. Ever.</span></p><p><br></p>

FICO® Scores and Your Mortgage

<p>Don’t go on a spending spree using credit if you are thinking about buying a home, or in the process of buying a new home. Your mortgage pre-approval is subject to a final evaluation of your financial situation.</p><p>Every $100 you pay per month on a credit payment could cost you about $10,000 in home eligibility. For example, a car payment of $300/month could mean that you qualify for $30,000 less in a mortgage.</p><p>Even if you have accumulated enough savings, you should consider not making any large purchases until after closing. The last thing you want is to know that you could have purchased a new home had you curbed the urge to spend.</p><p><br></p>

Why You Should Not Make Any Major Credit Purchases

<p></p><div class="se-component se-image-container __se__float- __se__float-center" contenteditable="false"><figure style="margin: auto; width: 588px;"><img src="https://library-ihouseprd.b-cdn.net/blog/credit-report.jpg" data-origin="100,930" alt="" data-proportion="true" data-size="588px,539px" data-align="center" data-index="0" data-file-name="credit-report.jpg" data-file-size="0" style="width: 588px; height: 539px;"></figure></div><p></p><p><span style="font-size: 14px;">When you apply for a mortgage loan, you expect your lender to pull a credit report and look at whether you’ve made your payments on time. What you may not expect is that they seem to be more interested in your FICO® score.</span></p><p><span style="font-size: 14px;">“What’s a FICO® score?” is a common reaction.</span></p><p><span style="font-size: 14px;">Each time your credit report is pulled, it is run through a computer program with a built-in scorecard. Points are awarded or deducted based on certain items such as how long you have had credit cards, whether you make your payments on time, if your credit balances are near maximum, and assorted other variables. When the credit report prints in your lender’s office, the total score is displayed. Your score can be anywhere between the high 300’s and the low 850’s.</span></p><p><span style="font-size: 14px;">Lenders wanted to determine if there was any relationship between these credit scores and whether borrowers made their payments on time, so they did a study. The study showed that borrowers with scores above 680 almost always made their payments on time. Borrowers with scores below 600 seemed fairly certain to develop problems.</span></p><p><span style="font-size: 14px;">As a result, credit scoring became a more important factor in approving mortgage loans. Credit scores also made it easier to develop artificial intelligence computer programs that could make a “yes” decision for loans that should obviously be approved. Nowadays, a computer and not a person may have actually approved your mortgage.</span></p><p><span style="font-size: 14px;">In short, lower credit scores require a more thorough review than higher scores. Often, mortgage lenders will not even consider a score below 600.</span></p><p><span style="font-size: 14px;">Some of the things that affect your FICO score are:</span></p><ul><li style="font-size: 14px;">Delinquencies</li><li style="font-size: 14px;">Too many accounts opened within the last twelve months</li><li style="font-size: 14px;">Short credit history</li><li style="font-size: 14px;">Balances on revolving credit are near the maximum limits</li><li style="font-size: 14px;">Public records, such as tax liens, judgments, or bankruptcies</li><li style="font-size: 14px;">No recent credit card balances</li><li style="font-size: 14px;">Too many recent credit inquiries</li><li style="font-size: 14px;">Too few revolving accounts</li><li style="font-size: 14px;">Too many revolving accounts</li></ul><p><span style="font-size: 14px;">FICO® actually stands for Fair Isaac and Company, which is the company used by the Experian (formerly TRW) credit bureau to calculate credit scores. Trans-Union and Equifax are two other credit bureaus who also provide credit scores.</span></p><p><br></p>

FICO® Score - a Brief Explanation

<p></p><div class="se-component se-image-container __se__float- __se__float-center" contenteditable="false"><figure style="margin: auto; width: 588px;"><img src="https://library-ihouseprd.b-cdn.net/blog/foreclosure-for-sale.jpg" data-origin="100,930" alt="" data-proportion="true" data-size="588px,489px" data-align="center" data-index="0" data-file-name="foreclosure-for-sale.jpg" data-file-size="0" style="width: 588px; height: 489px;"></figure></div><p></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">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.</span></p><p><span style="font-size: 14px;">Your local title company will be happy to provide additional information.</span></p><p><br></p>

Understanding Foreclosures

<p><span style="box-sizing: border-box; color: rgb(178, 34, 34);"><strong><em><u>January 12, 2019</u></em></strong></span></p><h4><span style="box-sizing: border-box; color: rgb(178, 34, 34);"><strong>It's PARTY TIME people! Come join us as we celebrate the FABULOUS sounds of MOTOWN. We have a great evening planned for you featuring the talented 7 piece live CK Band and special performances (all the way from Las Vegas and New York City) from "Stevie Wonder" and "Michael Jackson".</strong><br><br><strong>This event will take place on Saturday, January 12, 2019 from 6 pm to 11 pm at the beautiful Playa Largo Resort &amp; Spa in Key Largo. Come join us for amazing food, lots of dancing and GREAT entertainment.</strong><br><br><strong>General admission tickets are $150 pp. VIP admission is $200 pp.&nbsp;</strong><br><strong>Tables of 10 are available for purchase.&nbsp;</strong><br><br><strong>The Upper Keys Community Foundation, Inc., a newly formed 501(c)3 organized exclusively for the purpose of carrying out and supporting charitable and educational projects in partnership with the Key Largo Chamber of Commerce, is hosting this event.&nbsp;</strong><br><br><strong>UKCF is recognized as a tax-exempt public charity under Section 501(c) (3) of the internal Revenue Code. Contributions are tax deductible to the extent allowed by law.&nbsp;</strong><br><br><strong>The net proceeds from this event will help fund business grants, scholarships and community beautification projects in the Upper Keys.</strong><br><br><strong>THIS EVENT WILL SELL OUT. DON'T WAIT.&nbsp;</strong><br><strong>Buy/reserve your table of 10 now!</strong><br><br><strong>For ticket purchases and sponsorship opportunities, please call Marlen W</strong></span><span style="box-sizing: border-box; color: rgb(178, 34, 34);"><strong>eeks, Director and Event Chair of the UKCF, Inc. at 305-394-1680 or</strong></span></h4><p><br></p>

Magic Of Motown Key Largo, Florida January 12, 2019

<p><br></p><div class="se-component se-image-container __se__float-center" contenteditable="false"><figure style="margin: auto; width: 588px;"><img src="https://library-ihouseprd.b-cdn.net/blog/getting-keys.jpg" data-origin="100," alt="" data-proportion="true" data-size="588px,370px" data-align="center" data-index="0" data-file-name="getting-keys.jpg" data-file-size="0" style="width: 588px; height: 370px;"></figure></div><p>How Should I Take Ownership of the Property I am Buying?</p><p>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’s claims. Also, how title is vested can have significant probate implications in the event of death.</p><p>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.</p><p>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.</p><p>Common Methods of Holding Title</p><h3>SOLE OWNERSHIP</h3><p>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:</p><ol><li>A Single Man/Woman:<p>A man or woman who has not been legally married. For example: Bruce Buyer, a single man.</p></li><li>An Unmarried Man/Woman:<p>A man or woman who was previously married and is now legally divorced. For example: Sally Seller, an unmarried woman.</p></li><li>A Married Man/Woman as His/Her Sole and Separate Property:<p>A married man or woman who wishes to acquire title in his or her name alone.</p><p>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’s sole and separate property. For example: Bruce Buyer, a married man, as his sole and separate property.</p></li></ol><h3>CO-OWNERSHIP</h3><p>Title to property owned by two or more persons may be vested in the following forms:</p><ol><li>Community Property:<p>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.</p><p>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.</p></li><li>Joint Tenancy<p>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.</p></li><li>Tenancy in Common:<p>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.</p></li></ol><p>Other ways of vesting title include:</p><ol><li>A Corporation*:<p>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.</p></li><li>A Partnership*:<p>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.</p></li><li>As Trustees of A Trust*:<p>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.</p></li><li>Limited Liability Companies (L.L.C.)<p>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.</p></li></ol><p>*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.</p><p>Remember:</p><p>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.</p><p><br></p>

Common Ways of Holding Title

<p>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.</p><p>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’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.</p><p>It’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.</p><p>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.</p><p><br></p>

Know Why You are Selling

<p></p><div class="se-component se-image-container __se__float- __se__float-center" contenteditable="false"><figure style="margin: auto; width: 588px;"><img src="https://library-ihouseprd.b-cdn.net/blog/adjustable-rate-mortgage.jpg" data-origin="100,930" alt="" data-proportion="true" data-size="588px,388px" data-align="center" data-index="0" data-file-name="adjustable-rate-mortgage.jpg" data-file-size="0" style="width: 588px; height: 388px;"></figure></div><p></p><p>Now that you know what an ARM is and how it works, you may be wondering what the advantages and disadvantages are. So let’s explore that issue.</p><p>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.</p><p>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.</p><p>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’t rise, you may not be able to afford the larger monthly payments, thus causing you to default on your loan.</p><p>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.</p><p>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.</p><p><br></p>

Adjustable Rate Mortgages - The PROS & CONS

<p></p><div class="se-component se-image-container __se__float- __se__float-center" contenteditable="false"><figure style="margin: auto; width: 588px;"><img src="https://library-ihouseprd.b-cdn.net/blog/adjustable-rate-mortgage.jpg" data-origin="100,930" alt="" data-proportion="true" data-size="588px,343px" data-align="center" data-index="0" data-file-name="adjustable-rate-mortgage.jpg" data-file-size="0" style="width: 588px; height: 343px;"></figure></div><p></p><p>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.</p><p>Every ARM has basic components:</p><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><p>An ARM’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.</p><h2>The Margin</h2><p>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.</p><h2>The Adjustment Period</h2><p>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.</p><h2>The Interest Rate Cap</h2><p>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%.</p><h2>The Initial Interest Rate</h2><p>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.</p><p><br></p>

Adjustable Rate Mortgages - The Basics

<p><br></p><div class="se-component se-image-container __se__float-center" contenteditable="false"><figure style="margin: auto; width: 588px;"><img src="https://library-ihouseprd.b-cdn.net/blog/home-inspector.jpg" data-origin="100," alt="" data-proportion="true" data-size="588px,329px" data-align="center" data-index="0" data-file-name="home-inspector.jpg" data-file-size="0" style="width: 588px; height: 329px;"></figure></div><p><span style="font-size: 14px;">As a buyer, you are entitled to know exactly what you are getting. Don’t take anything for granted, not even what you see or what the seller or listing agent tell you. A professional home inspection is something you MUST do, whether you are buying an existing home or a new one. An inspection is an opportunity to have an expert look closely at the property you are considering purchasing and getting both an oral and written opinion as to its condition.</span></p><p><span style="font-size: 14px;">Beforehand, make sure the report will be done by a professional organization, such as a local trade organization or a national trade organization such as ASHI (American Society of Home Inspection). Not only should you never skip an inspection, but also you should be present with the inspector during the inspection. This gives you a chance to ask questions about the property and get answers that are not biased. In addition, the oral comments are typically more revealing and detailed than what you will find on the written report. Once the inspection is complete, review the inspection report carefully.</span></p><p><span style="font-size: 14px;">You have to demand an inspection when you present your offer. It must be written in as a contingency. If you do not approve the inspection report, then do not buy the home. Most real estate contracts automatically provide an inspection contingency.</span></p><p><br></p>

Importance of Inspection

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