FAQ

The property is officially transferred from the seller to you at “Closing” or “Funding”.

At closing, the ownership of the property is officially transferred from the seller to you. This may involve you, the seller, real estate agents, your attorney, the lender’s attorney, title or escrow firm representatives, clerks, secretaries, and other staff. You can have an attorney represent you if you can’t attend the closing meeting, i.e., if you’re out-of-state. Closing can take anywhere from 1-hour to several depending on contingency clauses in the purchase offer, or any escrow accounts needing to be set up.

Most paperwork in closing or settlement is done by attorneys and real estate professionals. You may or may not be involved in some of the closing activities; it depends on who you are working with.

Prior to closing you should have a final inspection, or “walk-through” to insure requested repairs were performed, and items agreed to remain with the house are there such as drapes, lighting fixtures, etc.

In most states the settlement is completed by a title or escrow firm in which you forward all materials and information plus the appropriate cashier’s checks so the firm can make the necessary disbursement. Your representative will deliver the check to the seller, and then give the keys to you.

A mortgage is a loan used to purchase real estate, typically a home, where the property itself serves as collateral for the loan. In other words, when you take out a mortgage, you are essentially borrowing money from a lender in order to pay for your home and then pledging your home as security for repayment of that loan.

Mortgages come with varying terms and conditions that define how much you borrow and how long it will take to repay the loan. Common features of mortgages include fixed rates or adjustable rates (which can change over time depending on interest rate fluctuations), fixed repayment periods (generally 15-30 years), or even interest-only loans with no principal component which are usually associated with adjustable than fixed). Additionally, some lenders may require private mortgage insurance if the equity of your down payment isn’t great enough so they can be sure they won’t lose their money in case of default.

A key factor to consider when taking out a mortgage is what kind of risk you’re willing to take on as an individual or family. Generally speaking, longer-term mortgages mean lower monthly payments but more overall interest paid by the borrower. Shorter-term mortgages could mean higher monthly payments but more equity in their homes sooner due to paying off debt faster while saving them on the total amount spent via interest. No matter what type of mortgage option you choose though, make sure it fits within your budget now and throughout its duration so that homeownership remains enjoyable rather than stressful!

Yes, you can use home equity to borrow money. Home equity is the difference between your house’s market value and the amount you owe on your mortgage. In simpler terms, it is essentially borrowing against an asset (your home) in order to access cash that can be used for a variety of purposes.

Many people use home equity for major purchases such as financing a college education, making renovations or repairs, medical expenses, investing in stocks and bonds, or even taking vacations. With a conventional loan, you are able to borrow up to 85% of your total available housing equity. On the other hand; with a line of credit (HELOC), there are no maximum limits when it comes to how much you can borrow against your property.

However; before deciding to take out a loan using your home’s equity as collateral – make sure that this kind of investment makes financial sense for you given your current circumstance and long-term goals. Taking out a large sum of money could put a strain on already existing debt payments – so be sure to consider all possibilities before moving forward with this type of plan. Additionally – bear in mind that although borrowing from existing housing equity does have perks such as tax deductions -in some cases – high-interest rates could outweigh these benefits if not managed carefully over time!

An FHA loan is a type of government-backed mortgage insured by the Federal Housing Administration, a branch of the U.S. Department of Housing and Urban Development. FHA loans are popular among first-time homebuyers because they allow individuals to purchase a home with a lower down payment compared to conventional loans.

The main feature of an FHA loan is the ability to make a down payment as low as 3.5% if your credit score is 580 or higher. For those with credit scores between 500-579, a 10% down payment is required. This makes FHA loans accessible to individuals who may not have a lot of savings or a high credit score. In addition to this, the seller can contribute up to 6% of the sales price towards closing costs, prepaid expenses, discount points, and other financing concessions.

However, because these loans are riskier for lenders, FHA loans require two types of mortgage insurance premiums: one that’s paid upfront at the time of purchase, and another that’s paid annually for the life of the loan. These premiums make the cost of an FHA loan more expensive over time. Despite this, FHA loans can be a good option for those who have limited resources for a down payment or a less-than-perfect credit score.

Mortgage insurance is a policy that protects lenders from losses if a homeowner defaults on their mortgage. If the borrower cannot repay the loan, the insurance will cover a portion or all of the lender’s loss. This type of insurance is typically required when homebuyers make a down payment that’s less than 20% of the home’s purchase price.

The reason you might need mortgage insurance is to qualify for a mortgage in the first place. Lenders see loans with smaller down payments as riskier. To offset this risk, lenders require mortgage insurance, which either gets added to your monthly mortgage payment or is paid upfront at closing. This allows lenders to offer loans to borrowers who might not otherwise qualify due to a lack of funds for a larger down payment or other risk factors.

While it may seem like an additional burden, mortgage insurance offers a way for individuals to become homeowners, even if they can’t afford a large down payment. However, it’s important to note that mortgage insurance does not protect the borrower if they’re unable to make their mortgage payments; it only protects the lender.