Carrying Debt After Retirement - a bad choice?

This is the second article I've recently read regarding the biggest challenges facing folks going into retirement - debt.  So, maybe it's true?

If college debt is a hindrance to young adults, mortgage debt is the drag on homeowners heading into retirement.

As we stay in debt and work, that's sort of OK.  But when the paycheck stops, the interest bills are still due.

One repercussion for older borrowers is that they will have to work longer, said Christopher J. Mayer, a professor of real estate at Columbia Business School[.] Another likely outcome is a spike in demand for reverse mortgages. This program enables homeowners 62 and older to borrow money using their home equity as collateral. The loan is repaid to the bank, along with interest and fees, after the borrower moves or dies. The funds must first be used to pay off the mortgage, which then frees the homeowner from monthly payments.

So what's your personal game plan?  Pay off the debt ASAP before retirement, or face it down the road?

Think about it.   Read the full story, Carrying Debt After Retirement.

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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Disclose a "meth lab" on your property.

When I first saw this, I thought it was a joke.  Many properties around the country have been used illegally by tenants, that's for sure.  But cooking meth as they call it creates additional problems for the property owner.  Some states require the owner to disclose when property has been used as a meth lab.

Here's the full article from Realty Times.

Are You Obligated to Disclose Previous Meth Contamination on Your Property?       

Written by Elizabeth Whited on Monday, 23 September 2013      

Meth labs have been found in some pretty strange places. To name a few: college campuses, hotel rooms, vehicles, and even inside a nursing home. But the most common, and logical (if setting up a meth lab anywhere could be considered logical) place is in a rental property, or home. After all of the cleanup, and the extensive procedures to take care of a previous meth lab on a property, is it still necessary to inform new renters, or potential buyers?
     
The answer, of course depends on the state. The Scripps Howard News Service conducted a search for states that require meth contamination disclosure to potential home buyers, and tenants. They found that only a little over half of the states in America require disclosure (with varying laws).
Real estate agents and home owners in Washington, Oregon, California, Montana, Idaho, Nevada, Wyoming, Utah, Arizona, South Dakota, Nebraska, New Mexico, Minnesota, Missouri, Oklahoma, Texas, Illinois, Arkansas, Louisiana, Indiana, Kentucky, Mississippi, West Virginia, North Carolina, New Hampshire, Alaska, or Hawaii, are obligated to disclose meth contamination in a home for sale.

Some states require written notices, some require no disclosure if the site has been properly cleaned and treated, while others allow disclosures to be undone, once the site is off of the state’s contamination list.

Even fewer states require disclosure for rental properties or units. Property managers and leasing agents in Washington, Oregon, California, Montana, Wyoming, Utah, Arizona, South Dakota, Nebraska, New Mexico, Minnesota, Oklahoma, Illinois, Missouri, Kentucky, West Virginia, and New Hampshire need to disclose the creation of methamphetamines in the unit. In Arizona, it is even illegal for anyone other than the owner to enter the unit, until it has been cleaned in accordance with the law (Scripps Howard).

If a rental unit is suspected of housing a meth lab, it needs to be inspected by professionals. The hazardous toxins and chemicals need to be cleaned and treated, as the side effects on humans, and especially children can be disastrous. Not to mention, the explosive tendencies of the chemicals themselves. The website www.methlabhomes.com updates property owners on meth contamination cleanup news.

Now would be a good time to make sure all property management staff have been trained in identifying classic meth lab red flags, since as Breaking Bad has taught us - it can happen anywhere, by anyone.

Source: http://media2.scrippsnationalnews.com/meth/

                     

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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Taking over or assuming an existing mortgage

Back when I began to practice law in the 1970s it was quite common for buyers to assume an existing mortgage rather than apply for a new one.  Believe it or not, there are still some loan programs that allow a buyer to still do that.

This article from the Times, Taking Over a Seller’s Loan, addresses the possibility of taking over an existing mortgage in limited cases, primarily with the FHA or VA has insured the loan or it’s an adjustable rate mortgage.

Homeowners with a mortgage insured by the Federal Housing Administration or the Department of Veterans Affairs should consider using their loan terms as a marketing tool when it comes time to sell.

Mortgage loans from both government agencies include a little-known feature known as assumability. In other words, the buyer of a home financed with an existing F.H.A. or V.A. loan may be able to take over, or assume, the seller’s loan, under the same terms, rather than take out a new mortgage.

“You could now have a seller saying, ‘I have a great house to sell you and a great mortgage to go with it, which is better than my neighbor, who only has a great house,’ ” said Marc Israel, an executive vice president of Kensington Vanguard National Land Services and a real estate lawyer. “It’s a very clever idea.”

So what’s the catch? In a rising market, the buyer needs more cash to put down.

When a house sold back in the 70s for $28,000 and had a $25,000 mortgage, the need for cash was $3,000.  But when prices run up by the 10s of thousands of dollars, well, you get my point.

Read the full article.

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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What to do when the house appraises too low?

As anyone attempting to borrow money since 2008 can tell you, it’s not a walk in the park. While credit card companies seem to be back to offering cards through the mail, mortgage lending has gotten tighter as set out in this story from the NY Times.

One consequence of the subprime mortgage crisis is a far more rigid home appraisal process. Borrowers can complain about lower than expected appraisals — which may mean they can’t borrow enough to meet an agreed-upon sale price, or can’t refinance — but lenders very rarely reconsider.

Why the low appraisals?  One reason is that lenders cannot dictate the appraisal value to the appraiser.

Federally enacted rules have set up regulatory walls between loan originators and appraisers so as to shield them from pressures to inflate home values. Now many banks order appraisals through a third party, typically an appraisal management company, which acts as an intermediary.

What to do?

One option is available to borrowers: a rebuttal letter to the lender. If such a challenge is to garner any attention at all, it must lay out solid and objective evidence of where the appraiser went wrong. But without a decent knowledge of appraisal guidelines, that can be difficult to do.

 But the rebuttal better be based on facts and you should have the appraisal in front of you.

You are looking for houses in the neighborhood that have closed within, say, the last six months, and they should be a similar style of house.  If the comparable is a Cape Cod, and you are buying a colonial, well, you get my drift.

Don’t forget to compare interiors, too.  Out dated kitchens and the existence of a swimming pool, for instance, can change the comparable value of two otherwise similar properties.

Is it easy to change the appraiser’s mind?  No.  But as the article recommends, have another bank in mind.

We have worked with several lenders who seem to find sunshine in properties (and borrowers) where others found only clouds.  Let us know if we can help.

Read the full article. 

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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Real estate dictionary for homebuyers

Realty Times has published a handy guide to terms likely to be encountered by homebuyers as they make their way through the real estate marketplace.

Normally, I'd send you a link to the article, but it's really a good article and worth being set out in full.  Here it is:

Demystifying Real Estate Terminology For Homebuyers. Written by Kristin Brown on Wednesday, 11 September 2013
                

First-time home buyers can have a tough time sorting through real estate terms spewed by real estate agents, lenders, real estate attorneys and other real estate professionals.

Here's a brief alphabetical glossary of some basic real estate terms first-time home buyers need to know:
Amortization: The repayment of a mortgage in small equal periodic installments of principal and interest, as determined by a payment plan to pay off the loan over a certain amount of time.
Appraisal:An appraiser's assessment of a property's value. A home sale is contingent upon an appraisal for at least the amount of the loan the buyer wants to secure.
Closing costs: One-time costs associated with buying a home, disclosed before closing, but due at closing. The costs can include fees for an attorney, recording, inspections, appraisals, title service costs, even pre-paid homeowner's insurance and taxes.
Contingency: Contractual conditions that must be met before a home sale closes. They can protect the buyer or the seller and can include a satisfactory home inspection, secured financing, adequate appraisal, etc.
Credit Report: A report card of your creditworthiness. Go to AnnualCreditReport.com to get one free credit report, every year, from each of the three credit reporting agencies:TransUnion, Experian, and Equifax. That's three free a year.
Credit Score: A numerical rendition of your credit report that plays a significant role in a mortgage approval, the cost of the loan and other terms of the loan. Get your credit score direct from the three credit reporting agencies.
Down Payment: Cash the homebuyer brings to the deal. A down payment reduces the amount financed by the amount of the down payment and brings equity to the deal. Many lenders require at least 20 percent down to reduce its risk, but various loan programs require as little down at 3.5 percent down.
Earnest Money: A deposit of good faith money, typically included with the offer to buy a house. Earnest money can become part of the down payment.
Escrow account: A lender-held account to which the buyer makes monthly deposits beyond the monthly principal and interest payment. The monthly payments are used to pay the homeowners property taxes and homeowner's insurance. Otherwise the homeowner is saddled with large lump sum tax and insurance payments once or twice a year.
Mortgage: A loan from a bank, mortgage lender, credit union or other lender to finance the purchase of a home. Mortgages vary and can include fixed- and adjustable rate mortgages, conventional loans, larger jumbo loans and loans backed by the federal government.
Points: Sometimes referred to as "discount points" these costs reduce the interest rate and are paid at closing or up front when used. One point is one percent of the mortgage amount.
Pre-approval: An official document and the process by which a homebuyer obtains proof he or she has been approved for a mortgage, pending the home appraisal and other financial contingencies. During the process, the lender verifies the buyer's credit score, income, debts, employment and other factors that go into a mortgage applications. A pre-approval letter says the buyer has been approved for a certain mortgage, again pending contingencies.
Title: A public records document that proves ownership of the property. A title also includes any claims against that ownership. During a home purchase, the buyer conducts a title search to verify the seller is the owner and if the title contains any judgments or liens against it.  [Professionally done for  you by Vested Land Services LLC, ed.]

This list is a small real estate glossary. Talk to your real estate agent if you have questions about other terms.

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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