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HomeReport
Real Estate & Finance News That Affects Your Home November 2008 - Page 3
SMART BUYING
Skipping Owner's Title Insurance Can Be A Costly Savings
 With lenders requiring larger down payments, some home buyers are looking for ways to minimize closing (settlement) costs--especially optional ones like owner's title insurance. Think twice before you skip protection of your title; buying a title policy may add hundreds (perhaps even thousands) of dollars to your costs, but it could also save you some difficult and expensive problems in the future.
Lenders require buyers to purchase title insurance policies to protect the lender's investment against unexpected liens and claims. Buyers can also purchase a title policy to protect their own homeowner investment--a one-time cost that provides protection as long as you own the property. According to the American Land Title Association (ALTA), a third of properties on which title investigations are conducted show some problem with the title that must be corrected before the sale is finalized.
Even if the home is new or you feel sure no one can lay claim to the property, it may be at risk for liens from loans backed by the property, builders, contractors, along with former owners of the home or land and their heirs. In addition, your title insurance company will handle court costs if the boundaries of the property are ever challenged by neighbors.
ALTA says that although rates are regulated, and therefore do not vary much from one insurer to the next, home buyers may be able to save a few hundred dollars by shopping around for the best price. You'll find more information online at:
Scottsdale real estate title insurance.
Housing Bill Sets Higher Loan Limits
 Before the Housing and Economic Recovery Act of 2008, signed into law in July, temporary increases in limits for FHA mortgages and conforming jumbo loans (those for more than $417,000) were set to expire after December 31, 2008. Thanks to the legislation, higher limits will be available after December to some home buyers, as follows:
- FHA loans--Beginning January 1, 2009, FHA loans will be limited to the greater of $271,050 or 115% of the local-area median home price. However, loans cannot exceed $625,500.
- Conforming loans--These are loans that can be purchased by Fannie Mae and Freddie Mac (the government-sponsored mortgage companies), which carry a lower interest rate than "sub-prime" loans that do not meet the two organizations' guidelines. Effective January 1, 2009, conforming loans are limited to the higher of $417,000 or 115% of the local-area median home price, not to exceed $625,500.
Call us to find out about loan limits in your area.
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Need To Sell Before You Buy?
Many of our buyer clients today also have a home they need to sell before they can buy. If you are thinking about buying--and selling--the information we've provided here will be handy someday soon, or you may know a friend or relative who could benefit if you pass it on. Referrals are the bedrock of our business--we'll appreciate yours!
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