Valentine’s Day can bring up questions surrounding a relationship, including, “Will the relationship affect our mortgage?” Buying a home and applying for a mortgage are big tasks and can be further complicated when a significant other is added to the equation. If you are married, applying for a mortgage in both you and your and your spouse’s name may seem like common sense. However, in some circumstances, applying in only one name may be your best option.
When a couple asks a lender for a loan, the bank may not average the two credit scores. They may instead focus on the lower of the two and calculate the loan terms based on that to arrive at the interest rate that will be charged. The debt-to-income ratio is a measurement that a lender uses to measure how much of the applicant’s income is spent on debt. If you leave a spouse with significant amounts of debt off the mortgage application it may lower the debt-to-income ratio and result in better loan terms.
- Only the Owner Policy protects the property owner’s interest – the Loan Policy does not;
- The Owner Policy insures the entire value of the property;
- The Owner Policy is a one-time premium and the policy remains in effect and covers the insured for as long as they own the property;
- Your coverage continues even AFTER conveying title by Warranty Deed in the event the new owner files a claim;
- Coverage includes protection for “undetectable” defects such as forgery or fraud;
- An Expanded Owner Policy includes survey coverage without a survey and covers you for things like building permits or zoning issues.
The Owners Policy of Title Insurance can be one of the most important purchases that you make for your new home. Your lender will require you to purchase a Lenders Policy of Title Insurance to cover them. For a minimal amount more, you can protect your interest as well.
Under Homestead Exemption laws any property designated as a homestead is exempt from execution and sale by creditors for the payment of debts. The protected amount differs in each state, but in New Hampshire every person is entitled to $1000,000 of his or her homestead to be exempt from the rights of creditors. That amount is slated to increase to $120,000 per person on January 1, 2016.
There are exceptions to the above and the following debts have precedence over the rights of homestead:
- The collection of taxes;
- The enforcement of liens of persons having done work for the construction, repair or improvement of the homestead;
- In the enforcement of mortgages on the property;
- In the enforcement of liens filed by homeowner or condominium associations for unpaid assessments.
No deed can convey or encumber the homestead right, except for a mortgage made at the time of purchase to secure payment of the money used to purchase the home, unless it is executed by the owner and spouse, if any. This is why, when a new mortgage is taken out or the property is conveyed, the husband and wife must both sign to release rights of homestead.
Title insurance is an insurance policy issued by a title company. It protects the purchaser or owner, against a loss that may arise by reason of a defect in your ownership or an interest you have in real property. There are two different types of title insurance policies available:
An Owner’s Policy of Title Insurance and a Loan Policy of Title Insurance
Since most property owners mortgage or borrow money at the time of purchase or during ownership, the lender can be expected to request protection of its investment against loss. Lenders generally insist upon a Loan Policy of Title Insurance to protect their investment in your property. An Owner’s Policy of Title Insurance protects your investment (equity) as the buyer or owner of the property. As the owner, you should want to have the same assurance as the lender so that the investment you have made cannot be lost because of a problem or defect with the title.
Title insurance is different from other types of insurance in that it protects you, the insured, from loss that may occur from matters or defects from the past. Other types of insurance such as auto insurance, life insurance, or health insurance, cover you against losses that may occur in the future. Title insurance does not protect against a defect that may originate at a later date.
There are numerous defects or problems that can arise to cause an attack to or loss of the title to your property. Some of these include problems not disclosed by the most careful search of the public records (the title search). Hidden risks can cause a total loss of your investment or heavy legal expenses in the defense of an attack on the title. Some title problems may show up months or years after the original purchase of the property.
Here are some examples of matters that can cause loss of title or an expensive lawsuit:
Forged deeds, releases, wills, or other legal documents
Failure of spouses to join in conveyances
Undisclosed or missing heirs
Deeds from minors, aliens, or persons of unsound mind
Errors in indexing of public records Liens for unpaid taxes including estate, inheritance, income, or gift taxes
Mistakes in recording legal documents
Wills that have not been probated
Title insurance defends you in a lawsuit attacking your title and either corrects the title problem or pays the insured’s losses up to the fact amount of the policy. The policy also protects you after you sell the property for the defects occurring prior to your ownership that cause a loss to a purchaser if the title was warranted by you. The title policy guarantees that at the date the deed was filed for record that the title was free of defects apart from those excepted to in the policy. The policy does not guarantee an actual amount of land.
How do you obtain Title Insurance and what does it cost.. Let us know that you want to purchase an Owner’s Policy of Title Insurance and we can tell you what it will cost. The cost is based on the purchase price of the property and your policy amount must be equal to the purchase price.
The new “Know Before You Owe” (TRID) rule goes into effect on October 3, 2015. Please review this information which will help you to speed the process.
Developers, do you have a new subdivision and need Deeds prepared from the new plan. We specialize in metes and bounds descriptions. Give us a call today @ 603-836-5309 or email firstname.lastname@example.org
A lot of people seem to think that the Real Estate tax year begins on January 1st. This is not true. In New Hampshire the tax year runs from April 1st of the current year, to March 31st of the following year. New Hampshire sets the new tax rates during the month of October. The bills are then calculated and delivered to the property owners of record. They are due 30 days from the date of the bill. Most towns bill on a semi-annual basis.
If a tax payment is not made when due, interest is assessed at a rate of 12% per annum. Once a property has had a tax lien filed the interest rate increases to 18%. The value of your property is based on the value as of April 1st in any given year.
Purchasing a home may be the single biggest investment you will ever make. Before closing on the home you will want to know that no other individual or entity has a right, title, lien or claim to the property. Seeing that your rights and interests to the property are clear is the business of a title insurance company. For a one-time title insurance premium you will receive continuous title insurance protection in an amount equal to the purchase price of the property or its current market value.
Prior to a policy being issued, the title insurance company will complete extensive research into relevant public records, maps and documents to trace ownership of the property and determine if anyone other than you has an interest in the property. Through its research, the title insurance company can usually identify any title problems that may arise and have these problems cleared-up prior to closing.
Typically your title insurance will protect you from loss if someone contests your title in a legal action or if there is a title defect that cannot be eliminated. The title insurance company will protect you from financial loss up to the amount of the policy.
Need more information, give us a call at 603-836-5309 or email email@example.com.
Beginning on August 1st you can say good bye to scheduling a Closing or setting a Closing Date. From now on, the date that you sign your documents will be called a Consummation.
The Good Faith Estimate is also going away, it will soon be known as a Loan Estimate or LE.
If you just learned what we, in the real estate closing industry, so commonly refer to as just the “HUD” or sometimes the Settlement Statement, that is gone, too. On August 1, 2015 that will be known as the Closing Disclosure or CD.
Have any questions on these changes…we would be happy to answer them for you!
The equalization rate is a ratio of total assessed value for properties in a community to those property’s true market values. This number represents the NH Department of Revenue Administration’s judgment of how closely assessed values match the market value.
For example, an equalization rate of 90% would mean that on average the property in your community is being assessed at 90% of its market value. Check back and we will have more on this topic.