New Home Purchase? Do not forget the home inspection

Home inspection for your new home purchase- Waive at your risk?

Buying a home at this time can be frustrating as potential buyers compete with each other to make the deal.  Presenting an offer that is "all cash," that is not contingent on obtaining a mortgage is one tool in the homebuyer's tool kit.  Another is waiving the home inspection.

There have been a series of articles on the wisdom of waiving the home inspection.

Thinking of Skipping a Home Inspection? Think Again and points out the pitfalls

“I would never waive it,” says Samantha Eisenberg, a Compass real estate broker who works in the Boston suburbs. “A home purchase is probably the biggest purchase of your entire life and we spend more time picking out a sweater…If I buy clothes online, I try it on and see how it looks. A house we go through in 30 minutes and you’re waiving inspections (over) something that costs over a million dollars.”

A full home inspection can unearth everything from structural issues, roof problems, or faulty electricity and plumbing. If the thought of dealing with any of these gives you a major headache, you’re better off following the recommendation of your realtor.

How to waive a home inspection contingency without getting burned

The home inspection contingency, meanwhile, is a bit of legalese that gives a buyer a way out of a deal.

In today’s super-competitive market, buyers are making their offers stand out by agreeing to ignore minor issues. Rather than skipping inspection contingencies entirely, savvy bidders are modifying the language in their offers, says Katie Severance, an agent at Brown Harris Stevens in Upper Montclair, New Jersey.

For instance, you might still conduct an inspection but promise the seller that you’ll overlook any single repair valued at less than $500, or that you’re scouting for only major issues such as mold, radon or a faulty foundation.

“The buyer hopes to send the message to the seller that they’re not going to nickel and dime them,” says Severance, author of “The Brilliant Home Buyer: 101 Tips for Buying a Home in the New Economy.”

Homebuyers should, in our humble opinion, keep something in mind when they read the home inspection report.  If you are buying a house that is 50 years old and the inspector says "the hot water heater is nearing the end of its useful life" or "the electric system should be upgraded" or "the roof is original," those items are not defects in the house.  

Happy househunting.

  

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!

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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Buying your dream home? Buy title insurance, too.

Buying Your Dream Home? Protect Your Property with Title Insurance

Purchasing a home is an exciting time for anyone, but that joy can soon fade if problems - such as lost or forged deeds or liens on the property - are revealed. Title insurance can protect buyers.

TOP CONSIDERATIONS

Examples of common title defects:

1. Lost, forged, or incorrectly filed deeds. Deeds are the documents that show who owns the property, and if not filed correctly, can lead to unclear ownership rights. This can include titles filed in the wrong name or titles never filed at all. 
2. Fraud. This can take many forms such as falsified documents making it appear as if a mortgage is paid off.
3. Construction and other liens. Unpaid contractors, homeowner association dues or property taxes can result in liens on the property. 
4. Encroachments. Physical structures, such as a neighbor’s fence, that intrudes on the legal property boundary can create title issues at closing. We always recommend getting a survey before you buy.

Types of title policies: Owner’s and Lender’s are the two primary types of title policies. 

An owner’s policy protects you for the purchase price of your home plus legal costs if a title or ownership issue arises. It is usually issued for the amount you paid for your home and will cover you as long as you own an interest in the property. An owner’s policy is not required but is a good idea to protect your own financial interest in the property. 

A lender’s policy protects the lender, and only the lender, if a title or ownership problem comes up after the property is purchased. Unlike an owner’s policy, the dollar amount that would be paid if there was a problem with the title decreases as you pay off the loan and ends when you pay off your mortgage. A lender’s policy is usually required to get a mortgage loan. 

THINGS YOU SHOULD KNOW

Know who you’re hiring: People often choose a title insurer and/or closing agent based on a referral from their real estate agent, lender, or home builder. Get quotes from multiple companies to ensure you are getting the best price. Check with your state insurance department to make sure the company is licensed to operate in the state. 

Start early: Once you have a signed agreement to purchase real estate, you have all the information you need to start getting title insurance quotes from companies. Start searching early to avoid delaying the closing. The buyer and seller don’t have to select the same title or closing agent so shop around to find the best deal for you. In some locations it is customary for the seller to pay for the lender’s policy, read your real estate contract to find out who is responsible for the title fees. 

Be cautious: Real estate often includes transferring large sums of money between buyers, sellers, banks, and closing agents. As a result, they are also a target for cybercriminals. Call your closing agent and lender right away if someone proposes a change to the payment transfer. Check email addresses closely when transacting business online. Call your closing agent and bank right away if something doesn’t seem right.

After closing, check that the deed was recorded in the county records: You can call your county recorder’s office (in New Jersey it is either the county clerk or register of deeds) or check its website to confirm the deed was recorded properly. Ensure the name and address is correct. If you received a loan to buy the property, check for the mortgage as well which will have the lender’s name and the property address. 

Keep a hard copy of your title policy and closing protection letter in a safe place: Title insurance safeguards your ownership rights for the entire time you own the home or property. You will need the policy documents to submit a claim. Title defects may not be found until you sell a property. 

TOP FOUR THINGS TO REMEMBER

•  A lender’s policy only covers the lender, so to protect your own financial interest, consider purchasing an owner’s policy. 
• Shop around for title insurance, even if you receive a title insurer recommendation from your real estate agent, lender or builder. Only by comparing prices can you ensure you are getting the best deal. 
• Take cybersecurity seriously when communicating transaction details through e-mail and ALWAYS pick up the phone and call the closing agent and lender to verify payment transfer details.
• Keep a copy of your policy in a safe place. You will need this information to file a claim.  

 

(Thanks to our friends at National Association of Insurance Commissioners for this information.)

 

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!

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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In the market to purchase a home? Answer this - can you afford it?

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.

A New York Times column asks - Can I Afford to Buy a Home? And then proceeds to a series of  questions that will help you answer the question.  Here we go:

Buying a home is the biggest financial decision most people will make, with many factors going into that decision. In some markets, renting might be a better option, depending on your personal circumstances.

Your Income

Taking on a mortgage is a long-term commitment. You should be confident that your income level will be stable for the foreseeable future, or at least three to five years, the minimum amount of time before it would likely make financial sense to sell or refinance. 

Your Savings

You will most likely be tapping your savings to make a down payment. Keep in mind that mortgage lenders won’t want you to deplete your savings entirely – they will want you to have cash reserves to cover unexpected expenses. Reserve requirements vary, depending on the lender and type of loan, but figure at least two months’ worth of payments.

There's more to read at the Times.  Hope you find it helpful.

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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Why First Time Buyers Flock to the FHA Loan Program

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.


While we don't offer mortgages, we know what they are and how they work.  40+ years' of experience is a great teacher.  Meanwhile, Realty Times looks at FHA loan programs and explains why they remain popular.

The FHA loan is one of the most-used mortgage programs for first time home buyers and there are some very good reasons why. The Federal Housing Administration introduced the FHA loan back in 1934 and since then has been the preferred choice for "first-timers."

FHA loans are one of the three "government-backed" mortgages. The other two are the VA and USDA programs. This government backing means should the loan ever go into default, the lender is compensated for all or part of the loss. With the FHA loan, the compensation to the lender is 100 percent of the loss. This compensation is in effect the result of an insurance policy and FHA loans carry two such policies.

There is an upfront policy that is rolled into the final loan amount and is not paid for out of pocket. The upfront policy is currently 1.75% of the base loan amount. The other policy is an annual one that is paid in monthly installments.

Today, for most FHA loans, the premium is 0.80 percent of the outstanding loan balance.

It is for this reason that lenders can relax their lending guidelines somewhat due to these two policies. As long as the lender followed the proper FHA guidelines when approving the loan, the guarantee is in place. Note, the FHA does not physically approve any mortgage. Instead, approved lenders do. Instead of the FHA being a mortgage program, it really acts more like an insurance policy.

The FHA does, however, prescribe a minimum credit score of 500 yet you'll be hard-pressed to find a lender who will approve an FHA loan with such a low score. In certain instances, lenders can approve an application with a 580 score while others ask for a score to be 600 or even higher. Individual lenders can set their own minimums.

Another reason why first-timers like the FHA loan is probably the most important one. The minimum down payment for an FHA loan is just 3.5% of the sales price. This makes it easier for first-time buyers to save up enough money for a down payment and accompanying closing costs. Conventional low down payment loan programs, on the other hand, make it harder to qualify by increasing rates for low down payment loans.

And speaking of money, FHA loans are a bit more lenient when it comes to receiving a financial gift. Buyers can receive a financial gift for all or part of the funds needed to close as long as the funds are coming from a family member or qualified non-profit agency.

This article and others written by real estate expert David Reed can be read on-line here.

For your next New Jersey title insurance 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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Understanding Title Insurance – and Why You Need It

Whether you are a first time #homebuyer or refinancing your #mortgage, title insurance is essential.  Here's an article from Zillow that tells you why.

You understand the benefit of car insurance and homeowners insurance, but chances are you’ve never thought about title insurance until you started the process of buying a house. What is title insurance? It’s a policy that insures that you won’t have any unknown claims made to the ownership of your home.

What could go wrong?

A clean or clear title is important because the title is what gives you ownership of a property. Imagine buying your dream home, closing the deal and then realizing the previous owner hadn’t paid property taxes for several years. Those taxes remain charged against the property and as the new owner, you are responsible. The taxing entity could even take your home. Or perhaps two sales ago someone sold the home without getting the signature of an estranged husband who now wants to stake his claim. Perhaps the previous owner didn’t pay a contractor for some work on the home and the company put a lien against the house. Or the power company shows up with a crew to take advantage of an easement though your new backyard. The scenarios are seemingly endless and tracking down every last possibility is more than you can practically do on your own. That’s where title insurance comes in.

An ounce of prevention

Unlike most insurance policies, you pay just a one-time fee and your property is covered for as long as you or your heirs own it. If you are taking out a loan to buy your home, the lender will require you to purchase lender’s title insurance to cover its investment. Essentially, the lender wants to make sure this is a legitimate deal with someone who has the full right to sell the property to you. But the lender’s policy will only cover the outstanding amount of the loan at the time a claim is made. You also want to make sure you have a policy that covers your interest, called an owner’s policy. When purchased together, the owner’s policy is a relatively inexpensive addition.

As you’ve probably guessed by the one-time fee, title insurance doesn’t work the same way most other policies do. The truth is that title insurers rarely have to pay out on claims. But that doesn’t mean you’re paying them for nothing. To the contrary, unlike other types of insurance, title insurance companies mostly incur their expenses upfront and help prevent any kind of title surprise later on.

While you are in the escrow phase of your purchase, the title insurance company will conduct a comprehensive search to make sure there are no such surprises lurking in the dusty files in some forgotten corner of the county courthouse. The title company searcher looks at deeds, wills, and trusts, tracing the history of the property back many, many years. The search can be manual or on a computer or both, depending on records in your area. Among the important questions is whether all past mortgages and liens have been paid. Does anyone hold an easement? Are there any pending legal actions? That’s where most of your insurance premium goes – to conducting that search. Then, just to make sure you’re protected in case they missed something, title insurance will cover your losses if it turns out later that they missed something.

In some areas, the cost of the title search and the title insurance are separate, while in other regions they are lumped together.

What kinds of policies are there?

What’s covered depends upon your policy. If you purchase only lender’s title insurance and end up losing your home to a previously unknown lien, your mortgage will be paid off. That’s the good news. The bad news is that you won’t get anything to cover the payments you’ve made, including the down payment. You’re out a house. That’s why experts advise buyers to get an owner’s policy as well.

Owner policies come in different flavors. A standard policy will generally cover you up to the purchase price of your home. If you want to protection that will cover inflation, you’ll want an enhanced policy or an inflation rider. That also provides coverage for liens filed after your closing date. Say, for example, you buy a new home and at closing everything is clear. The next day, a subcontractor who worked on construction of your home files a mechanic’s lien. Without an enhanced title insurance policy, you aren’t covered and may end up paying the subcontractor. It’s up to you to look at coverage and decide which owner’s policy you want to purchase.

Shop around

The only time you can purchase insurance is at closing. Whether buyer, seller or both pay for the coverage varies according to local custom. In some areas, the seller buys the owner’s policy and the buyer pays for the lender’s policy. Both policies take effect on closing day. The Real Estate Settlement Procedures Act prohibits sellers from requiring you to buy coverage from a specific title insurer. However, if the seller is paying for it, the seller can use whichever company they want.

You can purchase title insurance from whichever company you choose. But the reality is that your lender probably has a preferred title company and it is much cheaper to piggyback your policy onto the lender’s. If you have a strong preference, you may be able to convince the lender to use the company you prefer. Costs are fairly similar from company to company in any region.

If you find yourself looking at the prospect of finding a title insurance provider with dread and want to just go with your lender’s choice, don’t feel bad. You buy title insurance whenever you purchase a home. Lenders buy it several times a day. In this case, the lender’s interest – a good, solid insurance provider – lines up with yours. So don’t beat yourself up for not pushing back on selecting your own title company.

Is there anyone who doesn’t need it?

If you are buying co-op housing, cross title insurance off your list. When buying a co-op you won’t actually own real estate. Instead you’re buying shares in a corporation so no title insurance is needed. Everyone else? Pony up.

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, NJ, we are the title insurance agent that does it all for you.

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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Adjustable rate mortgage, is it right for you?

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. Even if you just want a title insurance rate quote. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

***

 

Ziggy cartoon pokes fun at adjustable rate mortgages (ARM.)

 

 

As the cartoon implies, an ARM customarily has payments that change with changes in the interest rate.

 

When first introduced about 30 years ago, no one knew quite what to make of them.  Even the Federal government was confused and had to come up with an entirely different formula for calculating the annual percentage rate, APR, on such loans.

 

ARMS were touted as cost savers because the initial interest rate was often a teaser rate, below what fixed-rate mortgages were being offered.  That aspect became the biggest target for fixed-rate lenders to aim at, introducing the concept of "rate shock" into the mix by frightening borrowers with the prospect of massive jumps in payments when the ARM mortgage interest rate adjusted.

 

Point of fact, ARMS have never been the bogeyman they were touted to be. There have been abuses in the ARM loan process, namely, writing loans with negative amortization, fixed payments, and the like, but the basic ARM remains a good way for a first-time homebuyer to get her foot in the door.

 

If you would like to know more about ARMS, read this booklet from the Consumer Finance Protection Board.

 



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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Tips for first time home buyers

Realty Times has an excellent article on tips for first time home buyers. Here it is:

7 Tips For First Time Home Buyers by Sonny Lee

The real estate market is beginning to rebound with both buyers and sellers taking notice. If you are ready to kick off the home buying process take the correct steps before the New Year. Make sure to be prepared for what 2014 has to offer with our home buying tips. In order to cover all of your bases and find the home that is financially sound and an investment you will enjoy for years to come.

1. Do Your Research Most likely a home purchase is one of the largest purchases you will make in your lifetime. Any large purchase should involve extensive research through professional venues and on your own. Begin your research with establishing a thorough knowledge of the buying process, pricing and your projected purchase area. Know the communities in which you are interested along with specific properties you admire in order to move forward with a wish-list and the confidence in knowing what you want.

2. Why Working with an Agent Saves If you are a real estate professional or have extensive knowledge to the point you can successfully navigate the purchase process, then by all means, proceed. However, it cannot be stressed enough that navigating a real estate deal without a professional agent or prior experience in real estate can be a financial burden and stressful situation to say the least. Even though an agent will receive a commission on the sale, this commission is most likely much less than the potential money lost through inexperience and negotiating a sale on your own. An agent will help you to find your way through the web of paperwork, placing offers, negotiating final prices and leading you through closing costs.

3. Get a Loan Pre-Approval This step is extremely important. If you do not get pre-approved for a loan then you may find a home of your dreams and not be able to proceed due to a loan that is not approved too late in the game. This helps you to set a price and move forward with a financially sound purchase. When it is time to acquire a loan, shop around for a lender that offers you an interest rate you are pleased with since it will be with you for quite some time. There is nothing wrong with speaking with several lenders. After you are pre-approved make sure to pay close attention to your finances and do not make any rash decisions or large purchases until after the purchase of your new home. This is incredibly important especially around the holidays when you are most likely spending more than normal.

4. Know Your Budget After pre-approval you will be more familiar with a price range to work with. It is good to know a range within you can begin your search and that you are comfortable with. This budget will need to take into consideration not only the price of the home, but also HOA fees, closing costs, insurance and costs incurred throughout the move. Sticking to a budget is good financial practice, but also key throughout the home buying process. If you don’t look at homes that are out of your price range then you will not get sucked into thinking you can “make it work.” Remember that this purchase will follow you for years down the road. Make sound investments that work with your budget and equity will follow, if you over-purchase though it can end up hurting you in the long run.

5. Create a Realistic Wish List Once a budget is established, your wish list is much easier to build upon. This list should include wants and needs, but most importantly it needs to capture a complete picture of the home and community you are looking for. Start big with the non-negotiables such as the specific communities you want to live in, the number of bedrooms and bathrooms you need, what style of homes you are interested in looking at, whether or not you need a garage, etc. After the larger must-haves are established it is easier to understand what is negotiable in the long-run. Don’t be afraid to wait until a home comes available that offers everything you need, but understand every home no matter how long you wait may not have everything you want. This does not mean you cannot work future upgrades or improvements into the final price of the home through negotiating with the help of an agent.

6. Find a Reliable Home Inspector Good home inspectors are on the same level as a good real estate agent. Imagine closing on your home, the process is finally over and then there is a leak in the basement, or the roof, or the electrical begins to malfunction. In order to avoid any pricey mishap research and procure an excellent home inspector since they will make sure if your dream home is in fact a safe place to live and a sound financial investment. Make sure your inspector is not only certified, but is also affiliated with a professional home inspector organization. Another point of conversation with inspectors is to procure an actual written report at the end of the inspection and not simply a check-list. We suggest going the extra step and being present for the inspection itself, you should not work with an inspector who is wary of having you there throughout the inspection.

7. Understand All Costs Involved Buying a home is not just a down payment and closing costs. Before beginning the process sit down and compile, along with your home budget, a list of closing cost fees and payments. On top of these costs there are also costs incurred post-purchase such as HOA fees, home insurance, taxes and maintenance. Some types of insurance for example are more important in certain areas of the country than others. For example, wildfire insurance is absolutely necessary in most parts of Arizona whereas in other parts of the country flood or tornado insurance is stressed.

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, NJ, we are the title insurance agent that does it all for you.

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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Borrowers to face another hurdle in a few months.

As a result of the fall-out from the mortgage implosion, Congress saw fit to step into the fray through the Dodd-Frank Act.  One of its progeny is the creation of a class of mortgage called “qualified mortgage.”  These are loans deemed safe by the government regulators for borrowers.

According to a report in the New York Times,

The mortgage industry is bracing for the coming of “Q.M.,” the new federal rules defining a “qualified mortgage” — or one underwritten to standards deemed safe for consumers. The implementation of Q.M. poses a compliance headache for lenders, though the average borrower is unlikely to notice any difference when the rules take effect in January. The most immediate differences will be felt by borrowers at the higher and lower ends of the income scale.

Among the basic criteria: A Q.M. loan must be fully amortizing with a term no longer than 30 years, and the points and fees paid by the borrower cannot exceed 3 percent of the total loan amount.

Lenders must also document the borrower’s ability to repay the loan, and confirm a debt-to-income ratio of no more than 43 percent.

So, what does this mean for Mr. and Mrs. Borrower?  In our opinion, tighter controls on borrowers as to income, etc.  In other words, lenders will be afraid to lend money to folks looking to move into their first home that doesn't qualify for some sort of first-time homeowner program, or folks trying to move up in home size.

What we find puzzling is that the Federal government offices overseeing mortgage and bank lending are just getting bigger and bigger, and less people are able to borrow.

Read the full story.

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, NJ, we are the title insurance agent that does it all for you.

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Stephen M. Flatow, Esq.

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165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

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

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Using gifts for real estate purchase downpayment

The New York Times discusses the impact on your loan application when you receive a gift towards your cash needs for closing.

HOME buyers trying to scrape together enough money to cover the typical 20 percent down payment frequently look to relatives for help.

The number of first-time homebuyers who resort to the Bank of Mom and Dad is about 25%.  No surprise here as prices in the metro-New York area are high and first time home buyers are young couples who are, literally, just starting out.

There are some pitfalls to avoid when you receive a gift.

But mortgage lenders closely scrutinize cash gifts. That critical check from the parents may not count toward your home purchase if you can’t thoroughly document its source and intention.

Be certain that the money is transferred by check or wire as the paper trail is essential and must be able to be followed by the loan processor.  If possible, get the money into the buyer's account several months before the closing.  It might result in less questioning by the bank.  Also, donors should check on their gift tax liability.

Nothing is simple, is it?

Read the full article here.

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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Naming that real estate development

As a lad I lived in Cameo Homes, a development of split level, ranch and, later on, bi-level homes in Monsey, New York.  It was carved out of farmland and woods in the late 1950s and early 1960s and was populated by World War II vets moving up from New York City apartments and other first-time homebuyers.  It was not a particularly pretty subdivision as almost every large tree that remained would soon die because of the changes to water levels, etc. brought about by large scale grading of the land.

Now I live in High Tor Estates in Essex County, New Jersey.  Our developer planted trees have grown well throughout most of the tract, but the railroad tie retaining walls designed to hold back the mountain (hence High Tor) on which we live is starting to show its age.

Cameo Homes and thousands of others throughout the country, have names with no relation to what one really finds on the ground.  The names are all about marketing, can't blame folks for that.  Here's a commentary on the subject from one of my favorite comics, Frazz.

What do you think?

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Vested Land Services LLC

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

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Houses look like their owners?

Realty Times has a quiz for you - What Home Am I?  First-time homebuyers, pay attention!

I always believed that dogs and owners begin to resemble each other, but a house?

Are you looking to get in the housing market? It's a great time to buy, with historically low interest rates and affordability rates.

Where does one start? Are you a country mouse or a city mouse? Your own personality and desires should be your guide. There are homeowners who avoid yard maintenance at all costs. Others love the privacy of a country property.

 Choosing the right home for your particular needs and temperament is crucial in today's market, where staying in a home long term is the best way to build equity.

Want to find your match? Read the full story.

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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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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From the Christian Science Monitory - Homebuyer tax credit: the scam of the century?

Posted on the Christian Science Monitor Paper Economy blogsite by SoldAtTheTop, worth publishing in full:


The Realtors backed it… the home builders backed it… the mortgage bankers backed it… virtually anyone with an financial interest in residential real estate transactions backed the Homebuyer Tax Credit (and it’s expanded extension) and now that the program is finally complete and a whole host of indicators (NAHB builder sentiment, pending home sales, existing home sales, home prices, etc.) suggest that the its effects were at best temporary, we can see fairly clearly that this policy was a scam of epic proportions benefiting few and costing many.

Reports indicate that the total credit cost could exceed $20 billion and while the cost of administration and vetting of claims is yet to be determined, it can safely be assumed to have been very costly, so what did we get for our Keynesian tax stimulus efforts?

First, it’s important to recall that early on in the program implementation it was reported that there was a massive number of fraudulently filed claims with thousands coming from inmates, children and tax preparers supposedly acting without the knowledge of filers that did not purchase homes.

Needless to say, the IRS has been busy with audits, so much so that as of June they blocked or froze over a billion dollars of claim payments.

As for properly filed claims, many of the homes purchased with the credit have already declined in value in excess of the credit’s maximum $8000 benefit (i.e. a mere 2.5% decline on a $350,000 home) leaving many unwitting home “buyers” in the cruel predicament of sinking in a quicksand of asset price deflation for simply having jumped for a slight nibble of the government’s meager tax carrot.

Finally, in trying to fully understand why the government undertook such a useless and poorly calculated program, it’s important to recognize those who truly walk away from this policy in better standing.

Realtors, home builders and mortgage bankers…. some of the most notable culprits of the housing bubble years… all walk away cleanly skimming the proceeds coming from the transactions of an estimated 2 million temporarily stimulated home purchases.

It should come as no surprise that these were the very same industry groups that worked tirelessly lobbying to enact this failed policy… it was a simple exchange… your tax dollars to their wallets.

While Washington elites likely continue to celebrate the “success” of this ludicrous policy, those opposed can at least draw some consolation from the recent refusal of NJ governor Christie’s to enact a similar program possibly indicating that public sentiment has turned against such overtly illogical and wasteful government efforts.

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Jersey City, NJ 07306

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Tax Credit Creates "First Time Fraudsters" - WSJ

When it comes to greed, the real estate market appears to be the breeding ground for schemes. The so-called sub-prime mortgage debacle leads to the recession. To help pick-up the real estate market, the government (read "we taxpayers") provide an incentive in the form of a tax credit for first time homebuyers.

Just as the mortgage schemers found the weaknesses in the mortgage financing system, so too have others found weaknesses in the tax credit.

The WSJ writes,

It's hard not to laugh when viewing the results of the federal first-time home-buyer tax credit. The credit, worth up to $8,000 for the purchase of a home, has only been available since April of last year. Yet news of the latest taxpayer-funded mortgage scam has traveled fast. The Treasury's inspector general for tax administration, J. Russell George, recently told Congress that at least 19,000 filers hadn't purchased a home when they claimed the credit. For another 74,000 filers, claiming a total of $500 million in credits, evidence suggests that they weren't first-time buyers.

As a "refundable" tax credit, it guarantees the claimants will get cash back even if they paid no taxes. A lack of documentation requirements also makes this program a slow pitch in the middle of the strike zone for scammers. The Internal Revenue Service and the Justice Department are pursuing more than 100 criminal investi-gations related to the credit, and the IRS is reportedly trying to audit almost every-one who claims it this year.

And so it goes in America. Read the full column, First Time Fraudsters.

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First-Time Home Buyer Tax Credit - Get yours while you can

From RealtyTimes.Com:

Home Buyer Tax Credit Ends Sooner Than You Might Think
by Broderick Perkins

You have less time than you think to cash in on the federal home buyer tax credit.

Unless legislation extends the deal, you'll have to close escrow by Nov. 30 to take advantage of the maximum $8,000 tax credit available for first time home buyers.

The federal tax credit for 2009 is only for first-time home buyers -- people who've had no ownership interest in a home in the three years prior to the purchase. Single and head of household tax payers can earn no more than $75,000. There's a $150,000 ceiling for married couples filing a joint return.

A tax credit is a big deal because, unlike a tax deduction which reduces your taxable income, a tax credit reduces the taxes you owe, dollar-for-dollar.

This home buyer tax credit can also net you a rebate if the credit is more than the taxes you owe. The rebate is the difference. If you owe no taxes, your rebate can be a maximum $8,000.

The Internal Revenue Service has posted Questions and Answers

Apply for your Home Buyer Credit by using IRS Form 5405

For your next title order
or if you have questions about what you see here, contact

Stephen M. Flatow
Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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