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Morristown, TN Real Estate News

By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
The Biweekly Mortgage - Who Needs It?Have you received an advertisement offering to save you thousands of dollars on your thirty-year mortgage and cut years off your payments? With email spam becoming more pervasive as everyone tries to get rich quick on the Internet, these ads are popping up with troublesome regularity.The ads promote a Biweekly Mortgage and for the most part, do not come from a mortgage lender. Exclamation points punctuate practically every claim: No closing costs! No refinancing! No points! No credit check! No appraisal! Save thousands! Cut years off your mortgage! To achieve these wonderful savings all you have to do is allow half of your mortgage payment to be deducted from your checking account every two weeks. It’s easy. Of course, there is a small set-up fee and...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
The Advantages of Different Types of Mortgage LendersWhat kind of lender is best?If you ask a loan officer, “What kind of lender is best?” the answer will be whatever kind of company he works for and he will give you a list of reasons why. If you meet the same loan officer years later, and he works for a different kind of lender, he will give you a list of reasons why that type of lender is better.REALTORS® will also have differing opinions, and those opinions have and will continue to change over time. In the past, it seemed like most would recommend portfolio lenders. Now, they usually recommend mortgage bankers and mortgage brokers. Most often they direct you to a specific loan officer who has demonstrated a track record of service and reliability.This article discusses the advantage...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Land ContractAn alternative to a non-conforming loan is the use of a land contract, which is allowed in some states. A land contract is an agreement between a buyer and a seller, where the buyer agrees to make periodic payments to the seller. The title to the property only transfers to the land contract buyer on fulfillment of the land contract obligations.A land contract can be helpful for those who need time to establish or improve their credit rating. There are only small closing costs, and payment can help establish a good mortgage payment record. This can help establish an overall good credit rating, and it is possible for the buyer to later refinance the land contract with a conforming loan.On the other hand, there are risks associated with land contracts. Land contract purchases ...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Items You Need When Applying For a LoanHave These Items Ready When You Apply For a LoanIt used to be that lenders mailed out verifications to employers, banks, mortgage companies, and so on, in order to verify the data supplied by borrowers. Nowadays, the interest is often in speed and getting answers quickly so alternate documentation has become more widely used. Alternate documentation means that underwriting answers can be obtained with information supplied directly from the borrower instead of waiting around for verifications to come back in the mail.The following is required for most standardized loans as part of alternate documentation processing. Items may differ according to whether your loan is a conforming (Fannie Mae or Freddie Mac), non-conforming (jumbo) loan, government lo...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
FICO® Scores and Your MortgageYears ago, credit scoring had little to do with mortgage lending. When reviewing the credit worthiness of a borrower, an underwriter would make a subjective decision based on past payment history.Then things changed.Lenders studied the relationship between credit scores and mortgage delinquencies. There was a definite relationship. Almost half of those borrowers with FICO® scores below 550 became ninety days delinquent at least once during their mortgage. On the other hand, only two out of every 10,000 borrowers with FICO® scores above eight hundred became delinquent.So lenders began to take a closer look at FICO® scores and this is what they found out. The chart below shows the likelihood of a ninety day delinquency for specific FICO® scores. FICO® Score O...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
FICO® Score - a Brief ExplanationWhen you apply for a mortgage loan, you expect your lender to pull a credit report and look at whether you’ve made your payments on time. What you may not expect is that they seem to be more interested in your FICO® score.“What’s a FICO® score?” is a common reaction.Each time your credit report is pulled, it is run through a computer program with a built-in scorecard. Points are awarded or deducted based on certain items such as how long you have had credit cards, whether you make your payments on time, if your credit balances are near maximum, and assorted other variables. When the credit report prints in your lender’s office, the total score is displayed. Your score can be anywhere between the high 300’s and the low 850’s.Lenders wanted to determine if...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Documenting Your Assets - Verifying Your Down PaymentWhen buying a home, it is not enough to just come up with the money. With the exception of no asset verification loans, lenders want to verify where the money for your new home will be coming from. If you can document that the funds are coming from your personal savings, the lender is more confident of your strength as a borrower.In addition, if you can verify that you have additional assets that are not needed for the down payment, it is important to document those, too. Additional assets are reserves you can draw upon during times of trouble, such as unemployment, medical emergencies, and similar occurrences. Additional assets can also help to document that you have a history of saving money, which makes you a more dependable borrow...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Closing Costs When Buying or Refinancing a HomeThis is a detailed summary of costs you may have to pay when you buy or refinance your home. They are listed in the order that they should appear on a Good Faith Estimate you obtain from a mortgage lender. There are two broad categories of closing costs. Non-recurring closing costs are items that are paid once and you never pay again. Recurring closing costs are items you pay time and again over the course of home ownership, such as property taxes and homeowner’s insurance. Some of the items that appear here do not traditionally appear on a lender’s Good Faith Estimate and lenders are not required to show all of these items.Non-Recurring Closing Costs Associated with the Lender.Loan Origination Fee - The loan origination fee is often referr...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Adjustable Rate Mortgages - The BasicsAn adjustable rate mortgage (ARM) has an interest rate that fluctuates periodically. This is in contrast to a fixed rate mortgage, which always has the same interest rate.Every ARM has basic components: An index A margin Adjustment Period An interest rate cap An initial interest rate The IndexAn ARM’s interest rate is tied to one of many economic indices, some examples of which are the 1-year constant maturity Treasury security, the Cost of Funds Index, or the London Interbank Offered Rate. Different indices move at different rates so know the characteristics of the index used for your ARM.The MarginThe interest rate for your ARM will be calculated by adding a margin to the interest rate from the index. The margin is basically the markup charged by ...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Adjustable Rate Mortgages - The PROS & CONSNow that you know what an ARM is and how it works, you may be wondering what the advantages and disadvantages are. So let’s explore that issue.Offering adjustable rates allows lenders to transfer part of the interest rate risk from themselves to the borrower. If you get a fixed rate mortgage and the interest rate then goes up, it costs the lender money. However, if you have an adjustable rate mortgage, as the interest rate goes up, so does your payment, thus compensating the lender. Adjustable rate mortgages are particularly useful when unpredictable interest rates make fixed rate loans hard to get.One of the main advantages of an adjustable rate mortgage is that the initial interest rate is lower than that of a fixed rate mortgage. A lower rat...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Why Do You Need Title Insurance?Title Insurance.It’s a term we hear and see frequently - we see reference to it in the Sunday real estate section, in advertisements and in conversations with real estate brokers. If you’ve purchased a home before, you’re probably familiar with the benefits and procedures of title insurance. But if this is your first home, you may wonder, “Why do I need another insurance policy? It’s just one more bill to pay.”The answer is simple: The purchase of a home is most likely one of the most expensive and important purchases you will ever make. You, and your mortgage lender, want to make sure that the property is indeed yours - lock, stock and barrel - and that no individual or government entity has any right, lien, claim to your property.Title insurance compani...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Understanding Title InsuranceWhat is title insurance? Newspapers refer to it in the weekly real estate sections and you hear about it in conversations with real estate brokers. If you’ve purchased a home you may be familiar with the benefits of title insurance. However, if this is your first home, you may wonder, “Why do I need yet another insurance policy?” While a number of issues can be raised by that question, we will start with a general answer.The purchase of a home is one of the most expensive and important purchases you will ever make. You and your mortgage lender will want to make sure the property is indeed yours and that no one else has any lien, claim or encumbrance on your property.The Land Title Association, in the following pages, answers some questions frequently asked a...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Understanding Preliminary ReportsAfter months of searching, you’ve finally found it -- your perfect dream home. But is it perfect?Will you be purchasing more than just a beautiful home? Will you also be acquiring liens placed on the property by prior owners? Have documents been recorded that will restrict your use of the property?The preliminary report will provide you with the opportunity, prior to purchase, to review matters affecting your property which will be excluded from coverage under your title insurance policy unless removed or eliminated before your purchase.To help you better understand this often bewildering subject, the Land Title Association has answered some of the questions most commonly asked about preliminary reports.What is a Preliminary Report?A preliminary report i...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Title Insurance Requirements for Insuring TrustsIn today’s world of busy probate courts and exorbitant death taxes, the living trust has become a common manner of holding title to real property. The following may help you understand a few of the requirements of the title insurance industry if title to property is conveyed to the trustee of a living trust.What is a trust?An agreement between a trustor and trustee for the trustee to hold title to and administer designated assets of the trustor for the use and benefit of one or more beneficiaries.Can a trust itself acquire and convey interests in real property?No. The trust is an arrangement between a trustee and the trustor. Only the trustee, on behalf of the trust, may own and convey any interest in real property. The trustee may only ex...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Title Insurance - Where Does Your Dollar Go?Title Insurance: As a homebuyer, the term is probably familiar - but is it understood? What is your dollar actually paying for when you purchase a title policy?Title Insurers, unlike property or casualty insurance companies, operate under the theory of risk elimination. Title companies spend a high percentage of their operating income each year collecting, storing, maintaining and analyzing official records for information that affects title to real property. Their technical experts are trained to identify the rights others may have in your property, such as recorded liens, legal actions, disputed interests, rights of way or other encumbrances on your title. Before closing your transaction, the title company will proceed to clear those encumbr...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
The Functions of an EscrowBuying or selling a home (or other piece of real property) usually involves the transfer of large sums of money. It is imperative that the transfer of these funds and related documents from one party to another be handled in a neutral, secure and knowledgeable manner. For the protection of buyer, seller and lender, the escrow process was developed.As a buyer or seller, you want to be certain all conditions of sale have been met before property and money change hands. The technical definition of an escrow is a transaction where one party engaged in the sale, transfer or lease of real or personal property with another person delivers a written instrument, money or other items of value to a neutral third person, called an escrow agent or escrow holder. This third ...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Statements of InformationWhat’s in a name?When a title company seeks to uncover matters affecting title to real property, the answer is, “Quite a bit.”Statements of Information provide title companies with the information they need to distinguish the buyers and sellers of real property from others with similar names. After identifying the true buyers and sellers, title companies may disregard the judgments, liens or other matters on the public records under similar names.To help you better understand this sensitive subject, the Land Title Association has answered some of the questions most commonly asked about Statements of Information.What is a Statement of Information?A Statement of Information is a form routinely requested from the buyer, seller and borrower in a transaction where ti...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Required Reporting to the I.R.S.Sellers of real property will have certain information regarding the sale reported to the Internal Revenue Service.This required reporting is a consequence of the Tax Reform Act of 1986; it is intended to encourage taxpayer compliance and aid in audit and enforcement efforts by the I.R.S.To help you better understand this subject, the Land Title Association has answered some of the questions most commonly asked about Required Reporting to the I.R.S.Who is required to report to the I.R.S.?Sellers of real property, under guidelines established by the I.R.S., are required to have their gross proceeds from the sale reported on a Form 1099S. When a settlement agent is used, the I.R.S. makes this agent responsible for the delivery of the information on the Form...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Creative FinancingCreative financing: You’ve heard of it, and, as a seller, the idea sounds pretty attractive. But, do you know everything you need to know about carrying back a second; essentially, about becoming a lender? You better know the same things that financial institutions know - you better know about lender’s title insurance.It’s time to sell your $150,000 home, a home that you have owned for fifteen years, a home in which you have substantial equity. The loan terms call for a $20,000 down payment from your buyer, a new $100,000 loan from a local savings and loan, and for you, the seller, to carry back a note for the remaining $30,000.Will you, the seller, need title insurance?Yes, you will. Everyone who retains an interest in the property needs title insurance. When you took...
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By Norma J. Elkins, Realtor - Elkins Home Selling Team
( Elite Realty Group)
Closing and Title CostsIt’s the big day.The day you go to the title or escrow company, sign your name on the dotted line, hand over a check and prepare to take ownership of your new home.It’s also the day that you and the seller will pay “closing” or settlement costs, an accumulation of separate charges paid to different entities for the professional services associated with the buying and selling of real property.It’s too often a day filled with uncertainty and stress.To help you better understand this confusing subject, the Land Title Association has answered some of the questions most commonly asked about title, closing and closing costs.What services will I be paying for when I pay closing costs?You will usually be paying for such things as real estate commissions, appraisal fees, l...
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Morristown, TN Real Estate Professionals