Understanding Title Insurance

Sep 1
Category | Blog

When you buy a home, you “take title” to the property and establish legal ownership which is documented by recording your deed in the county’s public records. The objective of title insurance is to protect a buyer’s rights and interest in the property and to assure the property transfer is secure.  In the event that there is an error in the process, the title insurance policy protects you from any financial exposure as a result of those errors.

Prior to issuing the title policy, the title company will obtain a title search which is needed to discover any liens against the property so they can satisfied prior to or at closing.   Approximately 25 percent of all residential real estate transactions have issues with the title and in almost all cases get resolved prior to closing.  The following are some examples of title issues:

  • Unpaid liens for real estate taxes
  • Mechanic liens from contractors who worked on the home but were never paid
  • Judgments, state or federal taxes or business loans owed by the seller
  • Mistakes in the legal description of the property or human error on previously recorded documents
  • Paid mortgages that were not properly discharged

There are two types ...

Closing On a VA Loan When Deployed

Aug 22
Category | Blog

Completing the final steps in closing on your new home comes with great relief and excitement.  At this point, it is likely you’ve prepared for your move and are all packed and ready to go. Yet there are times when an immediate move-in is not possible.

Remember the VA home loan can only be used for a primary residence and you must occupy the residence within 60 days of closing. Sometimes that’s not possible and the VA does make some exceptions for overseas deployment.

When must you occupy?

If you don’t occupy the property within that required time frame and the lender determines you have no intention of moving into the home, the VA can, in fact, call in the loan. Calling a loan means you must have the entire loan in full.

This 60-day timetable can also give the previous owners time to move out. If the sellers need another 30 days you can negotiate a temporary lease for them to pay you while they’re moving.

For those that are deployed or will be deployed during closing, the VA allows for a spouse to act as the occupant and fulfill the owner occupancy requirement. To prepare for a closing while a spouse is deployed overseas, a Power of Attorney must be drawn that allows the remaining spouse to sign ...

How the VA Views Credit Scores

Aug 14
Category | Blog

The VA doesn’t require a certain credit score. Rather, the VA does task approved lenders to determine the veteran has established a responsible credit history over recent years. However, individual lenders do require a minimum score with few exceptions. The most common minimum credit score is 620.

There are three main credit repositories

  • Experian
  • Equifax
  • TransUnion

 All three use the same FICO algorithm to calculate a credit score. Yet while they all use the same algorithm most often the three scores are different.

 For instance, a veteran submits a loan application for an approval, the lender then pulls a credit report as well as requests credit scores. The three reported scores are 710, 701 and 719. In practice, the lender will throw out the highest and lowest score and use the middle one.

 If there are two people on the loan application the lender will also pull scores from the second borrower and use the lowest middle score of the two applicants. These scores may be different because different merchants report payment activity at different times and may not subscribe to all three agencies.

The five categories that affect a credit score and to what extent are:

  • Payment history contributing 35% to the score
  • Available credit at 30%
  • Length of credit 15%
  • Types of credit 10%
  • Credit inquiries also 10% of the score.

While getting a VA loan is similar to getting other types of mortgages, there are a few differences. Here are some insider tips you can use.

 If you aren’t sure if you qualify for a VA loan, start with reading “Who is eligible for a VA loan?

  1. Certificate of Eligibility. You’ll need to provide the lender with a copy of your Certificate of Eligibility in order to obtain a VA loan. The fastest way to get this done in the modern digital world? Online. Visit benefits.va.gov to receive a copy of the certificate.
  2. 30 vs. 15. The longer the loan term the lower your monthly payments will be. Typically, the 30-year loan is the most common term borrowers select. A shorter loan term will provide higher monthly payments but there is much less interest paid over the term of the loan. However, the 15-year term makes the payments too high. However, lenders can also offer VA loan terms in 10, 20 and 25 years. To save on long term interest think about selecting a shorter term.
  3. Points or No Points? A “point” is one percent of the loan amount and is a form of prepaid interest to the lender. Paying points ...

Who is Eligible for the VA Home Loan?

Aug 1
Category | Blog

For those who qualify, there is no better loan program on the market if someone is looking to conserve as much cash as possible while keeping monthly payments in check.

While many know that active duty members are eligible for a VA Loan, there are many other service members that do qualify.

Who qualifies for a VA home loan?

  • Those who have been honorably discharged from the armed forces (veterans)
  • Those currently servicing in the military.
  • Active duty personnel who have completed at least 181 days of service.
  • Those who have served at least six years in the National Guard or Armed Forces Reserves.
  • Unremarried surviving spouses of those who have died in service or as a result of a service-related injury.
  • Cadets at the United States Military, Air Force or Coast Guard Academy.

Note, this means they are eligible to apply which doesn’t necessarily mean they will be approved. Borrowers are also required to:

  • Have stable income and employment
  • Be employed for at least two years
  • ...

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