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Home Equity Line of Credit loans

Home Equity Line of Credit loans

An important thing to consider if you are paying off a home equity line of credit, also referred to as a HELOC. These are usually open ended loans that allow you to borrow on them for a designated period of time. Therefore, if you pay off the balance, the mortgage that is the security interest for repayment may not get discharged. When paying the loan in full, you must request in writing to have the loan marked paid in full and discharged.

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What is a Form PA-34

What is a Form PA-34

In New Hampshire, the Department of Revenue Administration is responsible for equalizing the value of property in each municipality. Equalization is used to accurately apportion county and school district taxes among the cities and towns and to distribute state revenues to the cities and towns.

To equalize property values, the Department of Revenue Administration annually conducts a sales/assessment ratio study for each municipality. The information provided on the PA-34 form is needed to assist the Department in determining whether a particular sale involved is an “arms-length transaction” and should be included in our equalization sales/assessment study.

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Homestead Rights in New Hampshire

Homestead Rights in New Hampshire

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 $120,000 of his or her homestead to be exempt from the rights of creditors.

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.

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Tenancy in New Hampshire

Tenancy in New Hampshire

New Hampshire has two types of tenancy, Tenants in Common and Joint Tenants with Rights of Survivorship (JTWROS). This has been the law in New Hampshire since November 13, 1959.

Every conveyance of real estate to two or more persons creates a tenancy in common pursuant to New Hampshire RSA 477:18. That means, that if the person preparing your deed fails to state the type of tenancy, you will automatically become tenants in common. When one person dies their half of the property will pass to their estate according to the probate process.

If you want to have your property pass to the surviving person that must be specifically stated. Your deed must state after your names “as joint tenants with rights of survivorship”. The property automatically passes to the surviving joint tenant without the need of filing probate. You simply record the death certificate and in future deeds reference the death and state that you are the surviving joint tenant.

The failure to state tenancy, or stating it incorrectly, happens quite often, especially when the deed has been prepared by an out of state attorney who may not be familiar with our laws. Different states have different types of tenancy laws. We sometimes see a husband and wife owning property and thinking they owned it as joint tenants with rights of survivorship. One spouse dies and it is not until the other gets ready to sell the property that this is discovered. It can create quite a mess, take a while to clear up and ultimately delay the closing.

So use this information to take a look at your deed and be sure that you own your property the way you wanted. If you don’t, you can have a Quitclaim Deed prepared and record it to establish the proper tenancy that you want. Please give us a call at 603-836-5309 if we can assist you in this process.

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Assessment Versus Market Value

Assessment Versus Market Value

In an update year, assessments as of April 1st should be fairly representative of market value. Because sales are based on emotional likes and dislikes of buyers, there is no one right number, but rather a range of numbers depending on the negations and motivations of the buyers and seller involved in a transaction. The industry standard indicates that plus or minus 10% is reasonable because an opinion of value is subjective and will vary by this amount.

When there is a decline in the real estate market, taxpayers may see that their assessment is higher than what they could expect to sell their property for (market value). That does not invalidate the towns assessment of your property when they account for the local assessment to sales ratio because every year the New Hampshire Department of Revenue Administration (DRA) calculates an equalization ratio. This ratio represents the difference between the assessment and the market transactions (sales). Here is an example:

In the town where you live in New Hampshire, the DRA published the an equalization ratio of 1.15% as of 4/1/2017. The assessment on your home is currently $300,000. Homes similar to yours are currently selling for $250,000. You may think that you are being over assessed, but this is where the equalization ratio comes into play.

To determine the market value of your home you would take the assessment of $300,000 and divide it by the ratio of 1.15% which gives you an indicated market value of $260,870. Although this number may be higher than the $250,000 sale price, it is considered fair and equitable so long as it falls within the 10% allowance.

 So long as all properties are being assesses similarly, the assessments, even if they are higher than current market value are fair and equitable because everyone is being treated the same. The real estate market is constantly fluctuating which makes comparisons of assessment and sales very difficult. The Form PA-34 that you complete at closing is one of the tools that the DRA uses in determining the equalization ratio.

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Information for Homebuyers

Information for Homebuyers

A Buyer normally pays for the following:

Recording the new deed

Their share of the tax stamps. Tax stamps in New Hampshire are 1.5% of the purchase price and are split equally between the buyer and seller

The title examination and closing

The owner’s and lender’s title insurance policy

All costs associated with getting a new loan

A Seller normally pays for the following

Their share of the tax stamps

Any commission to the realtor for the sale of the property

To prepare the Purchase and Sales Agreement when no realtor is involved

Recording any lien release documents pertaining to their loan

For the preparation of the new deed conveying the property

Both parties share in the proration of the real estate taxes and there may be other miscellaneous costs associated with the sale.  Give us a call at 603-836-5309, if we can help with the sale or purchase of your home!

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What does a Title Company do?

What does a Title Company do?

A title company makes sure that the title to a piece of real estate is legitimate and then issues title insurance for that property.  Title insurance protects the lender and/or owner against lawsuits or claims against the property that result from a dispute over the title.

A title company will maintain an escrow account that contains the funds needed to close on the home and will conduct the closing.  At the closing the settlement agent from the title company will bring all the necessary documentation, explain it to the parties, collect closing costs and distribute monies.  Finally, the title company will ensure that the new deed and other and other documents are filed with the appropriate registry of deeds.

 

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Borrowers Underestimate Home Equity

Borrowers Underestimate Home Equity

Research done by Fannie Me shows that although home prices continue to rise, many homeowners and borrowers alike continue to underestimate the amount of equity they have in their homes.  According to a recent Redfin report,  misinformed homeowners and borrowers may be less likely to refinance their mortgages, apply for home equity loans, or even buy new homes because of this.

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How does Pokémon affect you as a Homeowner

How does Pokémon affect you as a Homeowner

The excitement surrounding Pokémon Go is causing problems for some homeowners as players eager to catch Pokemon trespass onto private property. Police in multiple states have issued warnings to Pokémon Go users to stay away from private and public spaces that they don’t have permission to access.

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Things to consider when applying for a joint mortgage

Things to consider when applying for a joint mortgage

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.

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