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What to Consider When Buying a New Home

Below you will find a few things that you really need to consider before starting the home buying process. Read carefully, this will help you immensely when you are trying to find the perfect home for you!

Home Loan Application Checklist

  • For the Last Two Years - Addresses of residences and landlords, names and addresses of employers, income sources, amounts and W2 forms.
  • Assets & Balances - Last three months of bank statements (all pages), stock and bonds statements, market value on real estate, all pension plan information (including IRA, 401K, VIP, etc.), and your most recent 30 days of pay stubs.
  • Liability Payments & Balances - Account numbers, payments and balances on all loans and credit cards, minimum payments, alimony and child support amounts, copy of divorce decree, and child care costs.
  • Self-Employment - Tax records for the past two years, current profit and loss statement, and corporate returns for two years.

Title Insurance – Why Pay?

Time to celebrate—you are finally moving into your new home! Then comes the bad news. There is a title dispute. It could be an heir to a previous owner challenging your right to the title for the property. Your property and the money you paid for it are suddenly at risk. It is not impossible. Title "defects" caused Abraham Lincoln's parents to lose three farms and while it is no longer the early 1800's, title problems still arise. Title insurance is what protects your investment and keeps this from happening to you. Read below to get a better understanding of title insurance.

What is Title Insurance?

Title Insurance is an insured statement of the condition of your ownership rights, or "title" to a certain piece of property. A title insurance policy describes your property in detail as well as any limitations there may be to your use and ownership. Most importantly, a title insurance policy guarantees that the property you are purchasing is free of undisclosed liens, confusion in the rights of ownership and other "clouds on the title." In short, it guarantees your ownership of the property you purchased! Some of the many risks against which title insurance protects you are:

  • Confusion From Similarity of Names
  • Forged Documents
  • Signatures of Minors or Mentally Incompetent Persons
  • Mistakes in Recording Legal Documents
  • Undisclosed / Missing Heirs
  • Fraud
  • Invalid Divorces
  • Misrepresentation of Marital Status
  • Unpaid Taxes
  • Clerical Errors in Public Records
  • Wills Not Probated
What is a Title Search?

Before a policy is issued, the title insurance company conducts an extensive search for "matters of public record" that affect title to the property. Upon completion of this investigation, the title insurance company issues a Preliminary Commitment for Title Insurance. This includes information regarding matters which affect the title to the property. Final insurance is provided at closing to protect both the owner (if an owner's title policy is purchased) and the lender (if a mortgage loan is involved).

What Does Title Insurance Cover?

If, after you purchase your home, a flaw in the title is discovered, the title insurance company generally agrees to:

  • Defend your title in the courts as insured at its own expense.
  • Correct or clear the title when possible.
  • Promptly pay you for your loss in the event of an unsuccessful defense of your title.

Policies differ, but some things are standard exceptions to a title insurance policy such as unpatented mining claims, water rights, Indian tribal regulations and reservations in U.S. patents.

How Much Does Title Insurance Cost?

Unlike other forms of insurance, the title insurance premium is paid only once. The policy has a perpetual term and provides coverage for as long as you are in position to suffer a loss. Furthermore, the coverage cannot be cancelled by the company. The premium rate is based upon the amount and type of coverage requested and some companies discount their rates based upon previous insurance. Each company must file a schedule of rates with the State Insurance Commissioner who regulates the activities of the industry.

VA Financing Q & A

Q: What is the maximum VA limit on home purchases with no down payment?
A: You can borrow up to $203,000 without a down payment.

Q: What if I'm posted overseas and won't be living in the home?
A: As long as your spouse will be occupying the property, you will meet VA occupancy requirements.

Q: What if my spouse is overseas or at a duty station when the loan closes?
A: We can close the loan if we get a Power Of Attorney specifically for the VA loan and house purchase. A general P.O.A. is not acceptable. We'll also need a letter from their commanding officer stating that they are "Alive and Well" at the time of closing.

Q: How do I obtain a Certificate of Eligibility?
A:
To get the Certificate of Eligibility, we will need to complete a Request for Determination of Eligibility (Form 1880). If you are no longer in the military, we will need a DD214. We will send these documents to the local VA office and they will provide us with your Certificate of Eligibility.

Q: Are VA loans assumable?
A:
Yes! There are several ways most VA loans can be assumed. These vary in complexity and can affect your eligibility.

Q: What types of property can I purchase?
A: With VA financing, you can purchase a single family residence, a condominium, a unit in a planned unit development (PUD), a 2-4 family unit or a manufactured home.

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