After The Contract Is Signed
1. How do I obtain financing?
There are many financing options that should be considered by a buyer. Consider asking your real estate agent or attorney to suggest a mortgage company or bank that offers good rates & service. Or consider asking the seller to hold a mortgage. Some sellers may be interested in this option if they don’t need the money right away.
2. What is a mortgage broker?
A mortgage broker is a person who brings borrowers & lenders together. Mortgage brokers do not lend their own money, nor do they service the loans they arrange. They are usually knowledgeable about many different loan programs & are able to cater their product to match the borrower’s needs. Their fee is usually expressed in percentage points & paid for by the borrower, although frequently they are paid by the lender.
3. Local lenders vs. regional banks (Which do I use?)
For the most part, local lenders collect the bulk of their deposits & make loans within 50 miles of their offices. It is this local specialization that makes them better able to make sound loans. They often provide lower interest rates & a longer term than large regional banks.
4. Do I need title insurance?
Title insurance gives you & your lender protection against financial loss & the possible expense of defending your title in court should someone dispute your free & clear ownership of the property after you have purchased it. It would be almost impossible to obtain a mortgage on a property without title insurance.
5. What is a title report?
A title report is a statement of the current condition of the right to ownership of a parcel of land. A title company examines the public records, reviews the findings & renders an opinion as to who the fee owner is, & lists anyone else they feel has a legitimate right or interest in the property, such as a mortgage lender or easement holder. It will also list any judgements or liens against the property that will need to be satisfied prior to the sale of the property.
6. How much homeowner’s insurance should I carry?
Have at least enough insurance to replace the value of the dwelling. Most lenders will require at least enough to cover the mortgage. They may also require that they be listed as an additional insured.
7. How can I make certain the neighbors haven’t crossed any boundary lines?
Always hire a licensed surveyor to prepare a survey of the property & flag & stake the property boundaries, especially with larger parcels. The survey should clearly show the exterior of any buildings & the boundary lines of the property & will help to determine any encroachments or other problems that may affect the title to the property.
8. How do I resolve any encroachment issues?
There are a variety of ways to resolve encroachment issues. One way is to sign a new boundary line agreement with the neighbor. A better way is to remove the encroachment. It is best to resolve this immediately upon purchasing the property. Failure to do so may result in the encroaching neighbor claiming a legal right to continue his use.
9. What happens if the seller is unable to convey title due to estate, bankruptcy, or tax problems?
The seller must clear all liens & judgements before title can be passed. If these problems cannot be removed, the purchaser can void the contract & have his down payment returned, together with any costs incurred for a survey & title work. or the purchaser may choose to resolve the liens & judgements.