planning to buy a home?
If you’re planning to buy a home, one of the first things you’ll need to find out is what’s covered by your current homeowner’s insurance policy. The first thing you should do, of course, is to call your insurance company and obtain a quote for your coverage. However, it’s important to understand that your policy only covers “home” damage. It does not cover such things as flood damage to your home from a burst pipe, fire damage from a fire or a broken door. Nor does it cover damage to your vehicle caused by vandalism, theft or an auto accident.
Although most banks will issue a deed in Lieu property note, working with a lawyer who specializes in Real Estate Law may prove more beneficial. Since the government establishes the maximum amount of title insurance on your house, you’ll likely pay the same regardless of whether you work with an insurance agent or a real estate lawyer. Nevertheless, a lawyer can help you determine whether there are any liens on your property that may apply to your loan.
Real Estate Settlement Procedures Act
You may also need to protect your lender in the event of a lawsuit. Under the Real Estate Settlement Procedures Act (RESPA), lenders must clearly notify borrowers of any liens on a property. In some circumstances, the lender may be liable for the full value of a property if a disputed lien occurs. Your lawyer can help you to establish whether your lender has a clear legal duty to notify you in writing of any encumbrances or liens on your real property. The lawyer can also help you determine whether you have a right to compensation for this loss under your mortgage contract or RESPA.
An important consideration when buying a home is whether to use a short sale, a deed in lieu of foreclosure, a refinance or an open offer. A short sale occurs when the closing costs and taxes have exceeded the market value of the property. If a homeowner sells the property for less than is owed on the mortgage, the lender typically agrees to accept a payoff in three to five years. If a homeowner chooses to use the services of a Realtor to assist in the short sale process, the broker can review deeds of trust, insurance policies, and title insurance policy records to select a title insurance policy that will cover the lender’s obligation to pay.
the sale of the property became due
In this situation, the borrower gives the lender permission to sell the house by taking over the deed to the property. The proceeds from the sale of the property became due and payable after the homeowner has paid his or her mortgage and all associated costs. With a refinance, borrowers pay off their existing debt and transfer the title to the new lender. A real estate law attorney can review the details of this option to help determine whether it is the best course of action.
A short sale occurs when a buyer who cannot qualify for a conventional loan makes an offer to a lender to buy a home without actually completing an appraisal. Instead, the bank or title company issues a check for a pre-determined price. If the buyer successfully purchases the home without initiating the appraisal process, the check is returned to the lender and the deal closes. It is important to realize that the bank has the right to take back the house if the buyer does not settle the account. For this reason, it is important to engage the services of a qualified real estate broker to assist with finding a buyer who can afford the property without going under.