Title Insurance Videos

Submitting these 6 pieces of information:

• Name
• Income
• Social Security Number
• Property Address
• Estimated Value of Property
• Mortgage Loan Amount sought

constitutes a valid loan application under the TRID rule. You may apply and submit these in writing OR in oral form; a live conversation, or a phone call, backed by a written record of the conversation is a legitimate application. Once these 6 pieces of information are submitted a creditor MUST supply a Loan Estimate for approved loans within 3 business days.

Yes, within defined limits.

Service charges for which YOU shop and select a provider may change; the creditor is NOT responsible for providers who are NOT on their written list. In addition, prepaid interest, property insurance premiums and escrow or reserve deposits may change without legal tolerance limits. Charges for recording services, and 3rd-party services ON the creditor list, grouped together may not exceed the Loan Estimate total for the same charges by more than 10%. Transfer taxes, fees paid to the creditor, mortgage broker or an affiliate of either and fees paid to a 3rd party for services the creditor does NOT permit you to shop are ZERO tolerance and must match the Loan Estimate.

Yes, if circumstances change, such as:

• a natural disaster damages the property or affects closing costs
• the title insurer providing the estimate goes out of business during underwriting
• new information on you or the transaction affecting settlement is discovered.

If any of these events change 3rd-party charges beyond the 10% tolerance limit creditors may issue a revised Loan Estimate. If a creditor issues a Loan Estimate they are presumed to have collected all 6 pieces of required information. They may not claim a change in circumstances by receiving one of these pieces of information AFTER issuing a Loan Estimate.

These costs are paid to outside parties, not the lender, but you don’t get to choose them. They may include:

• appraisal, which puts a value on your property on the lender’s behalf
• a credit report on you
• fees to assess flood risk of your property, or for ongoing monitoring of flood zone changes related to your property
• tax monitoring to keep track of your property tax payments
• tax status research to assess the state of tax payments on the property.

While you can’t shop for these services, the price for these services in your final loan disclosure MUST match the price on the Loan Estimate; items in “Cannot Shop” have 0 tolerance for change.

These costs are paid to outside parties and YOU are free to shop and compare providers for a variety of services. These might include pest inspection, or  a survey to verify property lines or a range of Title-related services.

Title services might include:

• a Lender’s title policy, which protects their legal interest in their loan collateral- usually the property itself
• settlement agent fees, paid to the individual or company responsible for facilitating the final transaction
• Title Search, which clarifies and documents legal ownership of the property
• a title insurance binder, which allows potential future use of the current title search results, conditions and exclusions for a short period to lower the cost of future title insurance.

If you select service providers from the list provided by the lender, their fees cannot change by more than 10% between the Loan Estimate and the final Loan Disclosure. If you select other providers the lender is not responsible for changes in those costs.

What is title insurance and why should any buyer get it when purchasing a home (single family, townhouse, condo, apartment, or whatever format your home purchase takes)? Doesn’t the attorney or settlement company handling the closing see to it that you have a clear title? Isn’t this just another way for someone to siphon a few coins off a real estate transaction?

Title insurance prevents the property owner from suffering financial loss if, at any time during his ownership of the property, someone comes along who can show that they have full, or partial, ownership of the property instead. A careful title search is done at the time property changes hands. On rare occasions mistakes are made anyway. Property can change hands in a number of ways including by deed, by will and by court action. Typically, these proceedings are recorded in different places. Searching the history of ownership to be sure nothing has fallen through the cracks is a tedious job that requires alertness, intelligence, and skill. It is very likely that the value of your property will go up over the years. As time passes, these elements are likely to result in your home equity’s being your largest asset. Just how devastating would it be if you eventually discovered that someone else owned what you’d always thought was your home? Do yourself a favor. When you buy a home, buy title insurance.  And watch the video to understand the essentials.

Purchasing a home is exciting. Once escrow begins, the excitement can change to frustration, particularly if you are not ready for the closing costs that quickly accumulate.

Closing costs simply refer to the fees associated with various things associated with the escrow process in a real estate transaction. In the excitement of having an offer accepted for your dream home, you can easily lose track of the fact you are going to need to have some serious cash on hand to pay them. Many people make the mistake of only assuming they need the down payment money, and have to rush around town trying to come up with money for the closing fees. Do yourself a favor, and discuss closing costs in advance with your real estate or mortgage person.  And watch this video to have a good mental picture of the costs that you're likely to incur.  

Discount points allow you to lower your interest rate. While this video simplifies things to help you remember, “points” are essentially prepaid interest with each point equaling 1% of the total loan amount.

Generally, for each point paid on a 30-year mortgage the interest rate is reduced by 1/8 (or.125) of a percentage point. When shopping for loans, ask lenders for an interest rate with 0 points and then see how much the rate decreases with each point paid. Discount points are smart if you plan to stay in a home for some time since they can lower the monthly loan payment. Points are tax deductible when you purchase a home and you may be able to negotiate for the seller to pay for some of them.

While this video simplifies things to help you remember: you'll present your paid homeowner's insurance policy or a binder and receipt showing that the premium has been paid. The closing agent will then list the money you owe the seller remainder of down payment, prepaid taxes, and so on. and then the money the seller owes you unpaid taxes and prepaid rent, if applicable.

The seller will provide proofs of any inspection, warranties, and so on. Once you're sure you understand all the documentation you'll sign the mortgage, agreeing that if you don't make payments the lender is entitled to sell your property and apply the sale price against the amount you owe plus expenses. You'll also sign a mortgage note, promising to repay the loan. The seller will give you the title to the house in the form of a signed deed. You'll pay the lender's agent all closing costs and, in turn, he or she will provide you with a settlement statement of all the items for which you have paid. The deed and mortgage will then be recorded in the state Registry of Deeds and you will be a homeowner.

For most real estate loans, you will receive a Closing Disclosure 3 business days before loan consummation – which frequently happens at the closing meeting.

At the meeting itself you should receive a copy of your Mortgage Note – your obligation to repay- your Mortgage or Deed of Trust the binding Sales Contract and – in some states – you may get the keys to your new home.

What you’ll see in this video is, there may be closing costs customary or unique to a certain locality but closing costs are usually made up of the following:

• Attorney's or escrow fees (Yours and your lender's if applicable)
• Property taxes (to cover tax period to date)
• Interest (paid from date of closing to 30 days before first monthly payment)
• Loan Origination fee (covers lenders administrative cost)
• Recording fees Survey fee First premium of mortgage Insurance (if applicable)
• Title Insurance (yours and lender's)
• Loan discount points
• First payment to escrow account for future real estate taxes and insurance
• Paid receipt for homeowner's insurance policy (and fire and flood insurance if applicable)

And any documentation preparation fees.

Like the video shows, “earnest money” is money you put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price though the amount can vary with local customs and conditions.

If your offer is accepted the earnest money becomes part of your down payment or closing costs. If the offer is rejected, your earnest money is returned to you. If you back out of a deal, you may forfeit the entire amount.

As we show you in this video, laws vary by state.

Some states require a lawyer to assist in several aspects of the home buying process while other states do not as long as a qualified real estate professional is involved. Even if your state doesn't require one you may want to hire a lawyer to help with the complex paperwork and legal contracts. A lawyer can review contracts make you aware of special considerations and assist you with the closing process. Your real estate agent may be able to recommend a lawyer. If not, shop around.

Equity is the value YOU own in property such as a house. It’s the difference between what’s OWED and what the property is WORTH in the current market.

The example this video shows - you have a house worth $300,000 today and you owe the bank $200,000.  Your equity would be $100,000. If the house is valued at $500,000 in five years, and you still owe $150,000 your equity will be $350,000. Equity grows if the property value goes up or if the amount owed goes down.  The key thing to remember, simple as it sounds, is that you "own" increases in value. The bank's loan doesn't go up if the home's value goes up. Equity in a home can be used as collateral for loans but a house is not a piggy bank. Home equity can become a key financial asset over time; treat it wisely.

While this video simplifies things to help you remember, except for the addition of an FHA mortgage insurance premium, FHA closing costs are similar to those of a conventional loan.

As of 2013, the FHA requires a single, upfront mortgage insurance premium equal to 2.25% of the mortgage to be paid at closing (or 1.75% if you complete the HELP program). This initial premium may be partially refunded if the loan is paid in full during the first seven years of the loan term. After closing, you will then be responsible for an annual premium - paid monthly - if your mortgage is over 15 years or if you have a 15-year loan with an LTV greater than 90%.

The video puts this in more visual terms, but yes! You can assume an existing FHA-insured loan, or, if you are the one deciding to sell allow a buyer to assume yours.

Assuming a loan can be very beneficial since the process is streamlined and less expensive compared to that for a new loan. Also, assuming a loan can often result in a lower interest rate. The application process consists basically of a credit check and no property appraisal is required. And you must demonstrate that you have enough income to support the mortgage loan. In this way, qualifying to assume a loan is similar to the qualification requirements for a new one.

Like the video says - real estate agents aren’t paid by the hour!They’re paid a percentage of the purchase price in a successful real estate transaction.

When one agent represents the sellers and another represents the buyers the commission is typically split between them. In the US, real estate commissions are commonly 6% of the transaction usually 3%/3% when split. No government or industry body sets commission rates.  Legally, commission rates ARE negotiable.  However, remember that agents only earn their commission on successful sales. Consider the work you want them to do for you to evaluate the value you should put on the commission they earn.

As we show you in this video, an escrow account is an account, established by your lender, to set aside a portion of your monthly mortgage payment to cover annual charges for homeowner's insurance mortgage insurance (if applicable), and property taxes.

Escrow accounts are a good idea because they assure money will always be available for these payments. If you use an escrow account to pay property tax or homeowner's insurance make sure you are not penalized for late payments since it is the lender's responsibility to make those payments.

Every house is unique; appraisers are trained and licensed for expertise in putting a value on properties.

Appraisers don’t work for the buyer or the seller;  their primary mission is actually to protect the lender who’s risking money against the home’s value. Appraisers have to weigh factors about the property and location - including size, condition and comparable properties - to appraise its current value. They know how to focus on conditions that affect value; dishes in the sink don’t; damage and neglect do. Appraisals lower than the proposed purchase price can affect transaction details. The seller might have to lower the price or the buyer might have to increase down payment or fund additional escrow. Appraisal seems a lot like inspection, but they’re not the same. You can think of it this way: Appraisers report on value to the lender Inspectors report on condition of the house and major components to the buyer. So - expect both appraisal & inspection in your transaction.

RESPA stands for the Federal Real Estate Settlement Procedures Act. This video tells you about it all.

RESPA requires lenders to disclose information to potential customers throughout the mortgage process. By doing so, it protects borrowers from abuses by lending institutions. RESPA mandates that lenders fully inform borrowers about all closing costs, lender servicing and escrow account practices and business relationships between closing service providers and other parties to the transaction. For more information on RESPA, visit HUD.GOV or call 1-800-569-4287 for a local counseling referral.

Like the video shows, mortgage insurance is a policy that protects lenders against some or most of the losses that result from defaults on home mortgages. Like home or auto insurance, mortgage insurance requires payment of a premium, is for protection against loss, and is used in the event of an emergency.

If a borrower can't repay an insured mortgage loan as agreed, the lender may foreclose on the property and file a claim with the mortgage insurer for some or most of the total losses. You generally need mortgage insurance only if you plan to make a down payment of less than 20% of the purchase price of the home. The FHA offers several loan programs that may meet your needs.

This video tells you about it all. PMI stands for Private Mortgage Insurance or Insurer. These are privately-owned companies that provide mortgage insurance. They offer both standard and special affordable programs for borrowers.

These companies provide guidelines to lenders that detail the types of loans they will insure. Lenders use these guidelines to determine borrower eligibility. PMI's usually have stricter qualifying ratios and larger down payment requirements than the FHA but their premiums are often lower and they insure loans that exceed the FHA limit.

Usually, Yes. Like the guy in the video says, by sending in extra money each month or making an extra payment at the end of the year you can accelerate the process of paying off the loan.

When you send extra money, be sure to indicate that the excess payment is to be applied to the principal and keep records. Remember that payment applied to loan principal is not tax-deductible. Most lenders allow loan prepayment, but some loans may have prepayment penalties. Ask your lender for details.

Remember these pointers from the video: you may want to include an inspection clause in the offer when negotiating for a home.

An inspection clause gives you an “out" on buying the house if serious problems are found or gives you the ability to renegotiate the purchase price if repairs are needed. An inspection clause can also specify that the seller must fix the problem(s) before you purchase the house.

What are the “Ability to repay” rules about?

In a nutshell, as this video shows, new laws require lenders to make a good-faith assessment of a borrower’s capacity to pay back their loan over time. It’s a longer-term view that goes beyond immediate income, debt and credit rating. These new Federal laws- supervised by the CFPB - require lenders to ask more questions - about income, assets, employment, credit history, and monthly expenses - as they relate to the proposed loan. For example, a lender offering a mortgage with a low initial rate must try to assess how a borrower will handle the later, higher rate as well. If you’re applying to borrow ask whether the program you’re considering is a Qualified Mortgage Ability-to-repay rules are built in to loans that meet Qualified Mortgage guidelines.  

Watch this video to get a quick idea of the seller's side of  closing. Also known as “settlement” and “escrow”  the closing is a meeting where property, money, title and liens are exchanged between all the parties involved.

The closing agent typically conducts the meeting.  They’ll review the sales agreement to determine payments and credits due from both sides, and ensure that transaction costs like title and taxes are paid.

• The buyer pays you - usually the remainder of down payment  and prepaid taxes.
• Adjustments like prepaid OR overdue taxes
• And, of course, commissions for brokers or agents are included.
• The buyer signs the mortgage note, promising to repay the loan
• and then signs their lien on the property.
• The lender pays you.
• You sign a deed, giving the buyer title to the house
• Title is recorded by the State, making the buyers the legal owner.

Sometimes you even shake hands and hand over the keys to their new home.

As this video explains, a signed sales contract doesn’t mean your house is sold. There are still financial, contractual and legal steps for both sides.

The buyer has to get financing to meet the contract terms - which includes credit checks. The property is inspected and appraised; title insurance and escrow accounts are set up while you locate new housing, pack and move. And take care of any obligations like painting or repairs. After the contract is signed, it can take a month or more of closing steps to reach the closing meeting. So plan on that when you plan to sell.

Watch this video and it’ll make sense.

Pre-qualification is an informal way to see how much you maybe able to borrow. You can be 'pre-qualified' over the phone with no paperwork by telling a lender your income, your long-term debts and how large a down payment you can afford. Without any obligation, this helps you arrive at a ballpark figure of the amount you may have available to spend on a house. Pre-approval is a lender's actual commitment to lend to you. It involves assembling financial records and going through a preliminary approval process. Pre-approval gives you a definite idea of what you can afford and shows sellers that you are serious about buying.

Yes, loan origination involves costs and fees. As you’ll see in the video, when you turn in your application you'll be required to pay a loan application fee to cover the costs of underwriting the loan. This fee pays for the home appraisal a copy of your credit report and any additional charges that may be necessary. The application fee is generally non-refundable.

Well, as this story shows, this will likely be the first opportunity to examine the house without furniture giving you a clear view of everything.

Check the walls and ceilings carefully as well as any work the seller agreed to do in response to the inspection. Any problems discovered previously that you find uncorrected should be brought up prior to closing. It is the seller's responsibility to fix them.