Homebuyers can cut closing costs

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

How Homebuyers Can Cut Closing Costs

Per MSN Money - 

You hear a lot about the down payment required to buy a home, but closing costs are also a significant consideration. You can’t eliminate all or even most of these costs, but there are steps you can take to reduce them.

There are some closing costs that can be negotiated and others that can't.  For instance, fees for title insurance in New Jersey are heavily regulated.  But you'll still find bad apples in the barrel (one of which is now involved in a massive class action) who overcharge.

So, the lesson to be learned is to ask what things cost!

Read the full article.

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Closing costs and your home purchase

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help.

This cartoon from the strip Non-Sequitur by Wiley caused me to laugh out loud because it's true.

But when you are a #homebuyer or if you are refinancing your mortgage, closing costs can land like a rock on your head.

In #NewJersey, what kind of #closingcosts can you expect?  In A - Z order-

Application Fee

Appraisal

Attorney Fee

Credit Report:

Escrow Deposit for Property Taxes & Mortgage Insurance

Flood Determination Search

Home Owners or Condo Association Transfer Fees

Homeowners’ Insurance

Origination Fee

Prepaid Interest

Private Mortgage Insurance (PMI)

Property Tax

Recording Fees

Survey Fee

Title Insurance

Transfer Taxes

Amounts, terms and conditions will vary depending on type  of transaction.
If you would like more information on closing costs, give us a call.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

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6 Don’ts When Buying Your First Home - a homebuyer's primer

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help.

We can't help you when you're home shopping (well, maybe we can answer some questions about closing and settlement costs) but here's a list of some no-nos put together by Realty Times.

6 Don’ts When Buying Your First Home

(Realty Times, written by Jaymi Naciri)

These are exciting times. You've finally outgrown apartment life or living with your parents or sharing a place with waaaaayyyyy too many roommates, and you're ready to take the leap to homeownership. Now it's time to prepare. As you embark on this journey, beware of six important don'ts that could potentially derail your purchase.

 Don't think it's too early to get prequalified

 So, you're just going to go out "looking" at houses, you say? The time when you just expect to drive around a little and maybe visit an open house or two is obviously the time when you're going to fall in love with a house and want to make a move on it right away.

If you're not already prequalified with a lender, you may not have a chance at it. Competition is fierce across the country thanks to low inventory, and well-maintained, move-in ready homes do not sit if they're priced right. Talk to a lender now to make sure you can qualify - and learn your max budget - even if you just think you're casually looking (because that can change in a hurry!).

 Don't wait to the last minute to check credit

 As a continuation of the casually looking conversation…you want to check your credit the second you start thinking about buying a home. You never know what's going to be on there. Even if you've never missed a payment and have always done a good job of managing your outstanding debt, there could be errors on your report that you're unaware of or even something from many years ago that you didn't realize had been reported to a credit agency. Those little boo-boos, accurate or not, could be hurting your score, and a low score could keep you from getting a mortgage at all. Give yourself time to correct errors or fix blemishes; every tick upward can help you get a better rate and make your home more affordable.

 Don't forget about PMI when calculating your monthly expenses

The idea of putting as little down as possible on your new home is attractive, especially if you're not a natural saver. Today, that can mean just three percent of your purchase price, depending on the loan. For FHA loans, it's three and one-half percent. The problem with making the minimum down payment is that you then have to pay Private Mortgage Insurance (PMI). 

 "PMI is a fee you pay on your mortgage until you owe 80 percent or less of what your home is worth. It's one reason why so many experts advise homebuyers make a 20 percent down payment; if you do, you avoid the evils of paying PMI," said Student Loan Hero. "PMI can cost between 0.3 percent and 1.15 percent of your loan annually. Depending on how much you borrow, that can mean thousands of dollars in extra costs until you can cancel your PMI." 

 Don't ignore the closing costs 

 Many of us micro-focus on the down payment when getting ready to buy our first home, but there is another important expense related to the purchase: The closing costs. Closing costs encompass a wide variety of fees, some or all of which may apply to you depending on where and what you're buying. They can include everything from the application fee and appraisal to the escrow fee to the home and pest inspection to the recording fees. You're looking at between two and five percent of your purchase price for closing fees, which can definitely add up. Many first-time buyers fail to factor this in when getting ready to purchase, and you don't want something that could amount to a few thousand dollars or more to come as an 11th-hour surprise. 

 Don't forget to factor in all the monthly expenses 

 New-home communities often quote a monthly payment that looks quite affordable and that can entice buyers who don't look more closely. That's because the payment is based on principal and interest only (Typically, you'll see a star next to the payment that tells you there's a disclaimer at the bottom of the page.). If you take a look at the small print, you'll see that there are also taxes and insurance to factor in. In some cases, there is also a homeowner's association fee. That monthly payment may not be looking so good anymore.

If you're buying your first home and coming from an apartment or other rental property, you may not have worked things like a gardener into your monthly budget. You'll also want to consider that if you're going up in square footage, there could an increase in your utilities, and you may be taking on payments for things like water and trash that were covered by your rental. It's best to have a true idea of what your monthly expenses are going to look like when buying your first home so you don't end up in over your head.

 Don't think you can go it alone

 Can you buy a home without an agent? Sure. Is it a good idea? Not usually. It could be that you are looking to buy a home that is for sale by owner. "In the industry, we call these types of sellers unrepresented," said The Balance. "Beware if you are trying to buy a home directly from an unrepresented seller. Odds are the seller won't know what she is doing or she might be taking advantage of you; either way, it could be problematic." 

 Unless you are a real estate attorney or are otherwise connected to the industry and aware of the laws, contract issues, etc., it's best for you to have representation, regardless of what type of home you are buying.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

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Sellers Have Closing Costs Also; an honest report from Vested Land Services LLC

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, #NewJersey, we are the #titleinsurance agent that does it all for you.

Question: I have recently become licensed as a Real Estate agent. The market is "hot", and many of my selling clients are asking what they will be charged for closing and settlement costs. Can you summarize these various costs?

Answer: That's a very good question. In my opinion, when a seller signs a listing agreement with a Real Estate Broker or agent, authorizing that person to sell the house, in addition to all the other forms which sellers receive, the seller should be given a estimated settlement statement. This statement will project the bottom line to the seller, based on the listing price. When an offer is later presented to the seller, the settlement statement should be updated, to reflect the actual terms of the proposed contract. And of course, the lender will also summarize all of the appropriate selling costs.

I have analyzed a number of real estate transactions, and the following charges are generally made to the seller:

Real estate commission: The seller should be informed of the dollar amount to be paid out of settlement for the commission. The broker should also make it clear that the commission is earned only if closing (settlement or escrow) takes place.

Mortgage payoff: Most sellers have at least one mortgage outstanding on the property. The seller's lender will be able to assist you in obtaining an approximate payoff figure, if you give them a tentative settlement date. Don't forget to add a daily interest charge until the lender receives the full mortgage payout. You should also inquire whether there will be any prepayment penalty. Some older loans still require the borrower (in this case the seller) to pay a percentage of the loan if it is paid off in full prior to the full expiration of the mortgage term. In some instances, the prepayment penalty can be avoided, or waived by the lender, and you should inquire as to the policy of the particular lending institution.

Points: This is perhaps one of the least understood areas of real estate financing. Sellers often question why they have to pay points to enable the buyer to get their loan. A point is one percent of the loan. For a number of years, no one paid points, especially since interest rates were very low. However, I have recently seen a revival of points being paid, either by buyer or seller or both.

Some loans, such an FHA or VA, put limitations on the amount which the buyer can pay for closing costs. Many buyers who will be obtaining conventional financing also want the seller to pick up some of these settlement charges -- including points paid to the lender.

Seller paid points are still deductible for tax purposes by the buyer, but the buyer must confirm this with his/her own attorney or financial advisor. Thus, while sellers want to get the most dollars from their house, there are often negotiation advantages if a seller offers to split points with the buyer. Such an arrangement may be the clue to closing the deal.

Termite: Most buyers require that a termite inspection be performed, at the seller's expense. Normally, the fee for this service runs between $50 to $75. But I have seen too many instances where the seller is "hit" with a sizeable repair bill, due to termites and damage being discovered by the termite company.

Ask the seller if they have a current contract with a termite company. If so, that company should be willing to give the required letter for no cost or at most a nominal charge. Finally, when you make arrangements with the termite company to do their inspection, make sure they will not do any repair work without informing you in advance. Since the seller is paying for these charges, the seller should have the option to shop around for another company.

Water escrow: In Maryland and the District of Columbia, water is the only utility that creates a lien on the property. In order for the title attorney to give free and clear title to the buyer, all liens must be paid and satisfied. Thus, it is standard practice for the settlement attorney or company to escrow some money to cover the final water bill. Usually, the office conducting settlement will make arrangements to obtain a final water reading, pay the bill, and refund the balance of the escrowed funds, if any, to the seller.

Release charges: When the seller obtained mortgage financing, it usually was in the form of a deed of trust. This is similar to a mortgage, but the property is deeded "in trust" to independent trustees who are authorized to sell the property if a default occurs. When the mortgage is paid in full, the trustees are entitled to a nominal "trustee's fee" and there is a small governmental charge to record the trustee's release. These items are always withheld at settlement and deducted from the seller's funds.

Other government charges: In the Washington metropolitan area, each jurisdiction imposes a tax (called Grantor's tax in Virginia, and Recordation and Transfer tax in Maryland and the District of Columbia). In Virginia, the seller customarily pays the Grantor's tax. In the other jurisdictions, payment of this tax is negotiable between buyer and seller, although often the tax is split between the parties.

Settlement charge: Some settlement offices will impose a nominal charge on the seller for "settlement."

Many sellers are often surprised when they learn, for the first time at the settlement office, that they will not be getting as much from the sale of their house as they had anticipated. In my opinion, it is incumbent on you -- as the seller's agent -- to advise your principal as accurately as possible what all of these miscellaneous charges will be.

Care to read the above on-line?  Go to Realty Times

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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High closing costs? Who's to blame?

Vested Land Services title agent title insurance refinance new jersey

Closing fees are a component of the home purchase or refinance. This article from the New York Times is a tad misleading about these costs and where the blame, if that's the right word, lies.

FOR some people, a major hurdle to homeownership is the closing costs that come on top of the required down payment. There are fees for everything from title searches to deed recordings, and if you happen to be buying in New York or New Jersey, you’ll find some of the highest costs in the country.

But these fees have been easing, according to a report released last week by Bankrate.com, which found that average closing costs, including mortgage origination fees, fell 7 percent nationwide from 2011 to 2012. In New York they fell 12 percent.

OK, so where do these high fees come from? Not from third party suppliers such as title agencies, but from lenders and government officials.

Yet, the article continues,

Title insurance is the biggest cost, averaging around 1 percent of the loan balance. Mr. McBride suggested that borrowers shop around, eliciting good-faith estimates from a number of lenders.

Poppycock. Rates in New Jersey are regulated as they are in New York and costs will be identical from title agent to title agent. Companies such as ours survive based on the level of service we provide our clients to get buyers and borrowers to the closing table as safely and expeditiously as possible. (Unless your title agent is owned by a bank or controlled by a real estate agency whose goal is to get you to the table no matter what.)

But the buyer/borrower cannot escape government charges. The county recording fee for an average mortgage in New Jersey is $240! And, in New York, you must add government mortgage taxes that add thousands to the cost of a home or mortgage.

The only place where the buyer/borrower can maneuver is with the lender. There are three words to remember when applying for a loan, shop, shop and shop for the mortgage and if the loan officer cannot explain something to your satisfaction, run for the hills.

Read the full article.

 

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Higher costs of F.H.A. loans now in place

We have previously written about the increase in costs associated with F.H.A. loans. Well, they're now in place. Did you know that an F.H.A. loan might cost you more than a conventional loan with P.M.I. (private mortgage insurance)?

To get the lowdown on the cost picture, here's a good article from The New York Times - Dealing With Higher Costs of F.H.A. Loans

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail vti@vested.com - www.vested.com

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The ABC's of home buying

Carla Hill, writing for Realty Times, discusses the questions and terminology confronting first time home buyers.

Here’s the full article:

As a first-time buyer, you have a lot of questions. There is terminology you don't understand. And there are expenses you need to anticipate. Here are some explanations of just that, to help you on your way to homeownership.

First, what costs should you expect? After you have become "pre-approved" for a mortgage, you will know how much you can spend (aka your "budget"). Pre-approval is done by the bank or lender who will be writing your mortgage. It is accessed by your: credit history, assets, employment history, and financial status. And it guarantees you a loan.

Being pre-approved can quicken the time it takes to close, as well as give you an advantage over buyers who are not pre-approved, should a home garner multiple offers.

Next, figure out how much money you'll need to put down. Are you looking at an FHA loan with 3.5 percent down? Or are you planning on putting 15 to 20 percent down? Financial expert Suze Orman recommends that in today's troubled market, you put at least 20 percent down on a house.

Closing costs are what are paid, well, at closing. You should expect to pay for an appraisal, title services, title insurance, transfer taxes, inspections, loan origination, private mortgage insurance, and homeowners insurance, among a host of other charges. The average closing costs are paid, yes, by the buyer. And they average around 2 to 4 percent of the total purchase price of the home. You can, of course, negotiate payment of closing costs with the seller. This is especially true in a market which favors buyers.

What is mortgage insurance? Mortgage insurance, also known as private mortgage insurance (PMI), protects your lender, should you default on your loan. And it can be required when you have made only a small downpayment. It costs around 1 percent of the total loan. According to the Federal Reserve Bank of San Francisco, "Under [The Homeowner's Protection Act of 1998], mortgage lenders or servicers must automatically cancel PMI coverage on most loans, once you pay down your mortgage to 78 percent of the value if you are current on your loan."

What is escrow? With a purchase as large as this, it is important that one party doesn't run off with all the funds! This is where an escrow account comes into play. All necessary and agreed upon funds are put into a third party account. When all terms have been met, then the funds are released to the appropriate parties. [Escrows, in the sense the term is used here, is not a New Jersey custom.]

What is an offer? When you have found a home you like, you'll discuss with your agent what a reasonable price pay is. This will more than likely be less than the price the seller is asking. And it will be based on the condition of the home, the price of home's in the neighborhood, as well as current market conditions. Remember, your offer is the price you are willing to pay for the property. You have signed the offer and, if accepted, you will be expected to follow through with the purchase of this home!

What are property taxes? Welcome to homeownership! Property taxes are paid each year to your local government at the county level. Some areas of the country charge much higher taxes than others, and the price is a percentage of the value of your property. That means that more expensive the house, the more expensive the taxes.

As a first-time buyer, it is highly recommended you work with a local real estate agent. They not only can answer any questions you may have, but their wealth of knowledge and experience will help guide you in a positive direction for this important transaction.

You can read the article on-line.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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