Owners title insurance is an elective expense when purchasing or refinancing a property. It only needs to be bought once by a homeowner and will guard against title issues for the entire time that they own a property. Understanding what title defects include will help homeowners decide whether to purchase title insurance. Title problems and the importance of title insurance in MA can be found below.

What Are Title Defects

Title defects are not typical but they can have a significant impact if they do exist. Defects are conditions that call into question the legal owner of a piece of real estate. Even though a title search is completed in most property transfers, some problems are not easily found and can stay hidden for many years and through several transfers of ownership. Any uncovered issues must typically be resolved before the completion of a sale, but in situations where they are not detected, title insurance protects the owner of the home.

Title Issues Covered by Title Insurance

Title issues describe a wide range of scenarios. Below are just a few examples (keep in mind that this can vary based on the insurance company).

• Missing Parties
• Unrecorded Liens
• Unfiled Releases
• Failure to Follow Proper Recording Instructions
• Unrecorded Encumbrances
• Undisclosed Heirs
• Forgery
• Mental Incompetence of a Signing Party
• Mistaken Identity
• Problematic Deeds

Title Problems And The Importance Of Title Insurance

If you purchased an owners title insurance policy, the insurance agent will either handle the issue or reimburse you for resulting losses. It may even help defend a law suit jeopardizing your ownership rights. Policies are bought based on a particular dollar value, so maximum limits do apply. Additionally, specific issues may be exclusions on your policy. Ask your closing attorney for a full list and for additional details on title problems and the importance of title insurance in MA. In the End, owners title insurance is the best protectopn of your ownership rights to a property. Even though the fee can be high, it is payable only one-time and covers you and your heirs for as long as you own a home. It is certainly worth the cost given that a home purchase can be the biggest single investment that you make.

Financial information plays a significant role in loan approvals. All finance companies evaluate your assets, earnings, credit and debts. These determine whether you can obtain financing and for what amount. The following is information on income versus debt ratio for Burlington MA mortgage pre-approvals.

Evaluating Income

Lenders will consider your gross monthly earnings. This includes recurring items that can be confirmed. Salaries are the most common type of income. You will be required to provide paperwork (such as W-2 forms) for the previous two years, giving them a sense of how stable it is. They may request explanations for any unusual items, such as fluctuations in earnings or inconsistent amounts. Alternate types of income may include alimony, investments, and stocks. Any items that you would like counted must have valid supporting paperwork. A history of earnings and possibility of future earnings is naturally very helpful. The documentation standard can vary among lenders and some exceptions may also be allowed. It is important to inform your mortgage consultant about all possible income sources to figure out what can or cannot be used.

Understanding Debt

Debt describes all current obligations such as charge cards and loans. The specific monthly payments on loans and other installment debt are used. For adjustable items like credit cards, minimum monthly payments are applied. These figures are usually noted in your credit report. Some companies may agree to exclude loans with under one year remaining in payments or that you can verify someone else is responsible for. Payment figures are totaled to calculate specific monthly obligations.

Information On Income Versus Debt Ratio For Burlington MA Mortgage Pre-approvals

Lenders compare the total income to debt to come up with the income versus debt ratio, which must stay under certain limits. Additionally, mortgage payments and your monthly debt must also not exceed a certain percentage in order for your mortgage to be approved. The exact percentage varies from lender to lender and for each program.

For instance, a lender may allow 28% for mortgage payments and 40% for total debt. Based on this example, a borrower making 60,000 annually (5,000 per month) may be allowed up to a 1,400 per month mortgage payment and 2,000 per month in total debt. Keep in mind that this is strictly an example and considers only the income versus debt part of the financial analysis that will be completed. There are additional factors, such as credit score and program specific requirements. It is essential to consult with a local lender for information on income versus debt ratio for Burlington MA mortgage pre-approvals for your personal finances.

Foreclosures are abundant and so is the misinformation on them. It is critical for current and future home owners to understand the facts. This blog covers Burlington MA foreclosure facts and advice for property owners.

Common Misinformation About Foreclosure

You Can Not Get Help Until You Stop Paying

Home owners can apply for loan modification and other assistance programs before missing any monthly payments. These programs assess your financial condition to figure out eligibility.

There Are No AlternativesOptions After the Foreclosure Notice Is Issued

Lenders take a bigger loss on foreclosure. Even when foreclosure proceedings have begun, lenders can still work out a solution to prevent foreclosure. A short sale is one solution prior to a finalized foreclosure. Short sales consist of finding a buyer for your property and getting the lender to allow a price below the amount owed.

You Must Move Out Right After the Foreclosure Notice

The foreclosure notice is only the first step in a lengthy process and it typically is not issued until you have missed several payments. It may take an extended period of time for a lender to get through the necessary process to evict you from a residence. Although you do not need to immediately leave your property, you should plan for it.

I Can Never Buy Another Property

Although a foreclosure impacts future lenders and severely drop your credit profile, you may still be able to get approved for another mortgage in the future. It is important to demonstrate good credit practices to increase your score during that time. Creditors may charge you a higher mortgage rate and request a larger down payment to minimize the risk of lending to you.

The Lender Takes All of My Belongings

Furniture, clothes, and other personal belongings are still yours. Only items attached to the property must remain. This includes flooring, light fixtures, plumbing, etc. Consider what you would usually leave behind if you were selling the property and use that as a general guideline.

I Do Not Owe Anything After Foreclosure

After foreclosure, a residence may sell for less than what owed to the bank. You are legally responsible for that balance. There may be ways for the bank to “charge-off” the balance. Consult with a local attorney for detailed options.

Burlington MA Foreclosure Facts And Advice For Property Owners

There are many other myths and facets of foreclosure beyond what is covered above. Procedures may vary from state to state as well. This article on Burlington MA foreclosure facts and advice for property owners is only a general overview. Be sure to get legal guidance if you are in danger of foreclosure, and do so before you miss any payments.

The home buying process normally includes one or more earnest money deposits from buyers to assure sellers that they are proceeding in good faith. These deposits must be handled in a specific manner so as not to interfere with the underwriting approval process. This blog offers details on earnest money deposits for Burlington MA real estate transactions.

Origin of Funds

It is critical for buyers to use their own money for earnest money deposits. Many loans specifically require buyers to utilize personal funds for all costs related to the transaction. Buyers are normally asked to provide copies of bank statements demonstrating that the funds were already in their bank account and that earnest money deposits were withdrawn against that account. Bank accounts should also include sufficient funds for for funds payable at closing. Lenders will verify all of this information before approving a mortgage. Buyers not using their own funds may compromise their ability to obtain a home loan.

Receiving Money aGifts

Certain financing programs permit monetary gifts to home buyers from their family members. However, home buyers should not ask family members to make earnest money deposits for them. The proper process entails a gift form, copies of account statements from the gift giver showing where the funds came from, and then bank statements from the home buyer displaying acceptance of the funds. Staying with proper procedures can lead to fewer delays when underwriters evaluate the loan application.

Getting Ready for Earnest Money Deposits For Burlington MA Real Estate Transactions

Buyers preparing for a future property purchase should take a few steps to prevent issues with their mortgage approval. First, they can make sure all money needed for earnest money deposits, down payments, and closing fees are in their own accounts and can be documented. Have at least two months of bank statements on-hand. The statements should not display any strange activity (such as large cash deposits). Lastly, when making earnest money deposits for Burlington MA real estate transactions, buyers should utilize funds from documented accounts. If accepting money as a gift, ask your mortgage consultant for the necessary procedure before accepting the gift. These precautions may reduce problems and lead to quicker underwriting approval.

Pre-approvals will not always lead to eventual mortgage approval. Mortgage companies complete a underwriting evaluation before issuing an approval. This formal process does not typically start until after a property is identified as they must evaluate both the financial data of purchasers and details of the property being purchased. The following are a few mortgage approval considerations for Burlington MA lenders.

Personal Information Considered

Income and Debts

Mortgage Companies will examine your assets, earnings and debts to determine whether you can afford the monthly payments. Good savings and a stable work history demonstrate financial health. The amount and types of debt you keep are also looked at. Mortgage companies estimate not just your current finances. They also try to gauge the long-term ability to pay bills.

Likelihood of Repaying the Loan

Mortgagees examine how likely you are to make payments over the life of the loan. This is where credit rating is important. Your past conduct is the best predictor of future behavior. A bad loan history may be detrimental to your likelihood of acquiring a mortgage or lead to increased payments.

Real Estate Matters

Appraised Worth

Lenders rely on appraisers to report important data on a property. The most important part of an appraisal is the price, which is provided in an exact amount. Mortgage Companies offer loans up to a specific percentage of the market price and the appraisal is utilized to justify that amount.

Lender Assurance

After a mortgage is given, lenders want assurances that their investment will be preserved. They typically expect title insurance. For loans with low down payments, mortgage insurance may also be charged. The cost of both title and mortgage insurance can vary depending on the mortgage type and can also affect the amount a buyer will be approved for.

More Mortgage Approval Considerations For Burlington MA Lenders

Mortgage companies may take a few weeks to review a loan application prior to issuing an approval, a denial, or requesting more data. Approval criteria can vary depending on the kind of mortgage and the situation of the buyer or real estate. The mortgage approval considerations for Burlington MA lenders above include merely a few general items to be cognizant of. Always consult with a mortgage consultant for advice on your home purchase.

An article about Steady US housing recovery is boosting economy was published by on November 19, 2012. More positive news on housing and the economy…..

Excerpt of “Steady US Housing Recovery Is Boosting Economy”

WASHINGTON (AP) From purchases and prices to builder sentiment
and construction, the U.S. housing market is making consistent
gains.

The latest evidence came in reports Monday that sales of previously
occupied homes rose solidly in October and that builders are more
confident than at any other time in 6 years.

New-home sales and home-price indexes have reached multi-year
highs. And Lowes Cos. on Monday reported a surge in net income, a
sign that home-improvement retailers are benefiting.

The housing markets recovery still has a long way to go. But for
now, its helping prop up an economy thats being squeezed by a
global slowdown and looming spending cuts and tax increases.

Joseph LaVorgna, an economist at Deutsche Bank, estimates that the
housing recovery could boost U.S. economic growth by a full
percentage point next year. Thats because a stronger housing
market would mean more jobs, especially in industries like
construction, and more consumer spending.

Housing could provide a meaningful and critical lift to
overall economic activity when other growth drivers, like exports,
are slowing, LaVorgna said.

Click here to read the full article.

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For additional information on this topic, contact Peter DaMore, Attorney at Law Offices of Peter T. DaMore Jr. at 781-229-7900 or pdamore@ptdlaw.com.

It is useful to find out components of Massachusetts recurring mortgage payments to properly estimate home ownership costs. The acronym PITI is commonly used to remember the items included, which are principal, interest, taxes, and insurance. Not all loan payments will include all of these items. It will differ based on your specific loan.

Components Of Recurring Mortgage Payments

Principal Contributions

Principal is essentially the balance of the loan. For most loans, a portion of your mortgage payment every month is allocated towards reducing the balance, although there can be exceptions to this such as interest only loans. In the first several years of paying a loan, very little of the payment actually goes towards principal, but this increases over time.

Loan Interest

Interest is the amount billed by lenders for use of their money. The interest rate is always a yearly rate but billed monthly according to the balance of the loan. Depending on your type of loan, the rate can stay the same for the entire life of the mortgage or it can fluctuate at specific periods of time.

Municipal Taxes

Taxes are levied by Massachusetts according to the assessed value of real estate. The amounts are quoted annually but often due in installments. Overdue taxes become a lien on a property and supersede mortgage liens. Many banks will, therefore, ask homeowners to set aside funds into an escrow account to guarantee that the bills are paid. Those funds are collected monthly by the lender as part of the regular monthly payment. The lender then pays the taxes directly rather than waiting for the borrower to do so. It is a method of protecting their interests in a property.

Insurance

There are different types of insurance that can apply to a mortgage. Hazard is typically mandated and mortgage insurance varies based on the specific loan. Both may be part of monthly loan payments.

Hazard insurance protects against damages. Lenders require this insurance since the home is collateral on the loan. Insurance premiums are payable yearly and many will want funds be put into escrow (similar to tax escrow). They will then submit payments to the insurance company directly to ensure the policy remains active.

Mortgage insurance is common for mortgages higher than eighty percent of the property value or sale price. It protects the mortgage company should a homeowner stop making payments. Lenders expect that they will not recover the full balance owed if it forecloses, so the mortgage insurance covers some of their loss. Although it protects the mortgage company, the borrower can be responsible for the payments.

Knowing Massachusetts Recurring Mortgage Payments

Not all financing is structured the same and therefore not all Massachusetts recurring mortgage payments will include all of the items above. There can also be other monthly expenses such as condo fees, which are not escrowed by mortgage companies but are a significant factor in calculating total monthly home cost. Remember that exact amounts are based on a specific home and interest rate, so any preliminary estimates will likely change.

Homestead protection is available to Massachusetts homeowners and protects their equity from unsecured creditors. This is an essential law for any homeowner. The Massachusetts homestead law details below addresses the most important aspects of this law.

What Is Protected

Homeowners build equity in a home over the years. This equity may not be much in the first few years of ownership, but will increase to a larger amount over time. There are scenarios where creditors or other parties may go after that dollar value to cover a financial responsibility of an individual. Shielding it may be critical.

Should a parent who declared homestead passes away, the homestead law protects the right of the family to occupy the property. The equity in the residence (up to a certain amount) may not be used to pay off the unsecured debts of the deceased individual. This includes spouses and children. This is just one example of many different scenarios where homestead protection could save you from losing your home.

Massachusetts Homestead Law Details

Massachusetts property owners get protection of one-hundred and twenty-five thousand dollars (125,000) without filing any forms. A Declaration of Homestead may be filed at the registry of deeds in your county to extend the dollar value up to five hundred thousand dollars (500,000). The filing requires a specific form and payment of a small fee, which varies from county to county but is usually less than one-hundred (100) dollars. If you are buying a new property, your closing attorney will provide the information to you.

Other Details

Homestead protection strictly applies to a primary residence. There are special provisions for persons over the age of sixty-two (62) and disabled individuals. The Homestead Law will not apply to all creditors or scenarios. Exceptions do apply, such as federal and local tax levies, mortgages on the real estate, and probate court decisions, just to name a few. For comprehensive information on this law, visit the Secretary of State website. The details in this article are offered as an introduction based on the facts available at the time it was written. It is subject to change without notice (as alterations may take place to the Homestead law). Please always consult with the website link above for current facts.

Ownership of a property is identified by its title. When real estate is sold, the title is transferred from one party to another. It is therefore a critical part of a property transaction. This blog provides information on title searches for MA home purchases, what it is, and why it is significant.

Definition of Title

Title is paperwork detailing the ownership and use rights of real estate. It is not one particular document but a history of documentation such as deeds, legal documents, property indexes, loans, etc. These are recorded at the local Registry of Deeds and is publicly available.

Title Searches For MA Home Purchases

A title search is a thorough examination of historical documents relating to a certain property. It starts with the present owners and traces back to preceding owners. The goal of the title search is to discover any issues or outstanding claims on a property. The ultimate goal is to confirm that a seller has the ability to grant ownership to another party.

Possible Title Issues

A title search can uncover problems such as a property lien not being released, unpaid taxes, and judgments against the owner. Some of these can be quickly fixed prior to the scheduled closing while others can take more time and effort to clear. Also, rare problems may be concealed and not easily found even with a thorough title search. Some examples are forgeries, misrepresented facts, inaccurate deeds, and clerical errors. These can stay hidden for several years and may jeopardize the rights of the current owner when finally exposed. Title insurance is designed to cover this risk but may not include coverage for every scenario.

Importance of Title Searches

Title searches are a crucial part of the property purchase process and are generally performed by a closing attorney or closing agent. No matter how meticulous a title search may be, it is worthwhile for home buyers to consider buying title insurance to cover hidden issues. Speak to your attorney for more advice on title searches for MA home purchases and to make an informed decision on title insurance.

When thinking about purchasing real estate, it is understandable to be very excited and want to start visiting properties right away. In that excitement, you may delay the vital step of requesting a mortgage pre-approval. A pre-approval is a basic review of your finances and credit worthiness to determine whether you are likely to be approved for financing. It is not a guarantee for a mortgage, but the best estimation prior to a full mortgage application. Having a pre-approval ready is important for many reasons. This article details reasons why buyers should obtain pre-approvals before seeing Burlington MA real estate.

Understand Your Price Range

Mortgage requirements and interest rates change frequently. A pre-approval will give you a clear understanding of the programs and alternatives available, what your up-front expenses will be, and more importantly, your price range. Without this, you may waste valuable time looking at homes that you can not finance or that are simply beyond your affordability. Knowing your price range also minimizes the emotional distress of viewing and wanting a home that you cannot purchase. This is one of the most important reasons why buyers should obtain pre-approvals before seeing Burlington MA real estate.

Strengthening Your Leverage

Burlington MA real estate with highly sought after amenities or the best price always move fast. A pre-approval gives you the power to make an offer on a hot listing. When you submit an offer, you usually must include a pre-approval letter. This illustrates to the seller that you are ready, willing, and able to purchase. It is unlikely that a seller would accept an offer and take the chance on a buyer without any verification that a buyer can even pay for the home. In multiple offer situations, a pre-approval is even more essential.

Time Savings

A pre-approval saves time during the offer process and when your loan is processed. Many sellers require a pre-approval with offers. Not having one ready will lead to delays in submitting your offer and may cause you to miss out on a property. Pre-approvals entail verification of income, assets, debts, etc. This may take some time depending on whether you have the information available. Errors in your credit reports can lead to additional delays. Starting and completing this step in advance will also save valuable time when processing your loan and achieving a quick closing.

Reasons Why Buyers Should Obtain Pre-approvals Before Seeing Burlington MA Real Estate

The details above on reasons why buyers should obtain pre-approvals before seeing Burlington MA real estate is something to remember when thinking of buying real estate. The real estate process can be complicated and stressful to begin with. Being diligent and prepared can minimize the stress and problems encountered along the way. For additional information, contact Peter DaMore at Law Offices of Peter T. DaMore Jr. by emailing pdamore@ptdlaw.com or calling 781-229-7900.